Hardie Moves Step Closer to Finalizing Fund
November 17, 2006 - James Hardie Corporation announced today that it could finalize its asbestos compensation deal after a positive ruling from the tax office. The Daily Telegraph reported that, after several set-backs, the company expects that the proposed fund, set up to compensate Australians with asbestos-related personal injury claims against former James Hardie subsidiaries, can now move forward.
Whether the fund would ever begin to compensate victims has been in doubt since an Australian Taxation Office (ATO) ruling in June this year said that the special purpose fund (SPF), worth up to $4.5 billion over 40 years, could not be treated as a charity for tax purposes.
"James Hardie will now move to finalize an amended FFA (final funding agreement) and related agreements with the NSW Government so that all relevant documents can be signed as soon as possible and lender and shareholder approval sought," the company said.
The company and the government of New South Wales (NSW) must first execute an amended FFA, and other conditions must also be satisfied, including the NSW Parliament passing facilitating legislation, said the newspaper account.
"The resolution of these issues involves uncertainty and there can be no assurance that obtaining the ATO rulings will lead to a finalization of the amended FFA that is required to resolve the position," James Hardie officials said. "However, James Hardie believes that obtaining the ATO rulings is an important milestone in implementing the funding proposal."
The company hopes to hold a shareholders meeting in early February to approve the deal.
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