BorgWarner Announces Divestiture Of BorgWarner Morse TEC LLC To Enstar
Recently, it has transpired that BorgWarner (BW)
has sold its branch Morse TEC, which is responsible for asbestos and
fulfillment of other environmental obligations, to Enstar Holdings (US).
Some automotive components may contain asbestos
because of its heat-resistant qualities, but when these components start to
break apart or disintegrate, the asbestos escapes into the air and can be
extremely dangerous for people around and hazardous for the environment.
Morse TEC holds approximately $0.8 bln
liabilities related to asbestos and other environmental claims coming from BW’s
legacy production services. Morse TEC's assets include insurance rights related
to coverage of this type of obligations as well as cash and marketable
securities.
According to BW representatives, Enstar is a
true professional in dealing with legacy liabilities and has solid experience
in asbestos. This helps the company in elimination or reduction of exposure to legacy
non-operating obligations as well as in management and deployment of capital.
Learn about possible consequences
of exposure to asbestos for workers of repair shops
Enstar’s professionals will take the lead over
the operational management team of Morse TEC, including the control over all of
Morse TEC’s asbestos claims and a range of current insurance policies.
Thanks to this deal, BW plans to get rid of the
asbestos commitments, insurance assets and deferred tax assets in its balance
sheet reports. BW assumes that this deal may lead to after-tax loss in its consolidated
financial reports of up to $40 mln in the Q4 of 2019.
Enstar officials say that the company has a proven record of providing solutions for large businesses and their historic liabilities. The company put in high hopes on a growing potential of this business area.
