OWENQ amazing today,Watch FDMLQ also! both Asbestos play!
UPDATE 1-U.S. asbestos stocks up as senators near fund deal
Tue Apr 12, 2005 05:30 PM ET
(Recasts, adds details, byline, analyst quote; changes dateline, previous WASHINGTON)
By David Brinkerhoff
NEW YORK, April 12 (Reuters) - Shares of companies facing asbestos lawsuits soared on Tuesday after the chairman of the Senate Judiciary Committee and the ranking Democrat said they were close to agreement on legislation to compensate asbestos victims.
Pennsylvania Republican Arlen Specter and Vermont Democrat Sen. Patrick Leahy both spoke optimistically of the prospects for legislation to create a $140 billion U.S. fund to pay asbestos claims.
With thousands of lawsuits pending against them in courts, a handful of bankrupt manufacturers like W.R. Grace & Co. GRA.N> got a big lift on rising hopes the fund will be passed, helping them pay claims and exit Chapter 11.
"The bigger your problems, the bigger your rally today," said Charles Gabriel, an analyst with Prudential Equity Group LLC. "Investors have sensed deep value in these companies if we ever get a global settlement in asbestos."
Shares of bankrupt W.R. Grace & Co. closed up 32 percent at $10.63 on the New York Stock Exchange.
Bankrupt Federal-Mogul Corp. (FDMLQ.OB: Quote, Profile, Research) shares rose 11 cents, or 33 percent, to 46 cents on over-the-counter Bulletin Board trading.
Shares of USG Corp. (USG.N: Quote, Profile, Research) rose $8.63 a share, or 24 percent, to $43.90.
Fibers of asbestos, used in building materials, are linked to cancer and other diseases. The issue has cost companies billions in claims and prompted some to file for bankruptcy protection.
Specter has been negotiating with members of both parties on a draft proposal for the $140 billion fund, which would be financed by companies facing asbestos lawsuits and their insurers, who would be rewarded by having their liability capped.
Clinching Leahy's support has been key to Specter's hopes for getting the fund proposal out of his committee and improving its chances on the Senate floor. Specter has been struggling for months to get backing from both parties.
"This bill may become viable for the first time, but again we have to wait and get through the end of this day," Gabriel said, adding, "We're still skeptical ... This could be totally reversed tomorrow."
AI
