A COMPANY that operated an asbestos factory in the region may have to pay out up to £160m in compensation claims from former workers, it emerged yesterday.
Engineering group Cape is putting £40m into a fund that will make payments to workers suffering from asbestos- related illnesses. It anticipates they will file claims for at least the next 46 years.
The Wakefield-based company closed its factory in Bowburn, near Durham, in 1989, with the loss of 170 jobs. It has several sites across the UK, including one in North Shields, North Tyneside.
The group has received a rising number of claims from staff who were employed in its factories or who handled the toxic material during contract work.
Workers' families have also submitted claims, along with people who lived near one of its plants, the company said.
A total of £18m has been paid to settle claims since the start of 2000, and Cape said it was difficult to predict the long-term financial impact of its liabilities.
Actuaries have estimated that the company could be facing a compensation bill as high as £160.2m, with the peak value of claims expected to occur in 25 years' time.
Chairman Martin May said its proposal to set up the fund and top it up with more money in the future should enable all claims to be settled.
He said: "This provides significant 'de-risking' for Cape, removes a significant obstacle to growth, and leaves the group better able to generate the resources needed to secure the continued payment of compensation to claim-ants."
A share issue will raise £32m, while Cape will put its own money and bank loans into the fund.
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