Dec 17 (Reuters) - Dow Corning has decided to shut its semiconductor plant in Tennessee, calling it economically inviable, and reduce by about $1.3 billion its contribution to a fund to pay out claims arising from lawsuits around its bankruptcy in 1995.
Dow Corning, a joint venture between Dow Chemical Co and Corning Inc, will record a pre-tax charge of $1.5-$1.6 billion related to the shut down of the facility, Corning said in a regulatory filing. (1.usa.gov/1AIAQXe)
Dow Corning blamed the closure of the plant on oversupply, high operating costs and impact of tariffs on silicon imported into China.
Dow Corning’s estimated remaining obligation to fund future claims arising from breast implant product lawsuits was about $1.7 billion at Sept. 30, based on the full funding cap set when the company emerged from bankruptcy in 2004.
The company, and its adviser, determined that actual funding required for the claims fund is expected to be lower than the full funding cap, and so reduced its implant liability by about $1.3 billion.
Corning said it expects to record an after-tax gain of about $400 million related to the decrease in Dow Corning’s lawsuit fund and a charge of about $500 million related to the plant closure.
Dow Chemical said it would record a fourth-quarter net charge of about $100 million. (Reporting By Kanika Sikka in Bengaluru; Editing by Savio D‘Souza)