PPG fulfilled initial funding requirements June 9, based on agreed-upon terms of the trust settlement. The obligations include cash funding of approximately $500 million (pretax) and the transfer of about 2.78 million shares of PPG common stock, which were hedged at approximately $22 per share (incremental cash payment of about $60 million). These shares were already included in the company’s outstanding diluted share count. Lastly, PPG relinquished any claim to its equity interest in Pittsburgh Corning and conveyed to the Trust its ownership interest in Pittsburgh Corning’s European subsidiary.
In addition to the initial funding obligation, the company exercised an option to prepay all future cash obligations, totaling a net of approximately $250 million (pretax), including a 5.5 percent prepayment discount.
All payments were applied against a previously established PPG reserve for the total asbestos-trust obligation. The company utilized cash on hand for the payments, and this funding will have no impact on PPG’s previously stated cash-deployment targets.
These actions complete PPG’s funding obligations to the Pittsburgh Corning Asbestos Trust, and PPG has no ongoing responsibility for the Trust’s operation or management.
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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thompson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson-Reuters). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com has been representing injured workers and their families who have suffered occupational accidents and illnesses.
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