Industrial engineering group ABB, trying to restore profitability by cutting costs in adverse markets, today unveiled a vital $1.5 billion financing deal with a group of 20 banks.
The deal gives Swiss-based ABB a cushion to execute a drastic overhaul and restore margins in the market for power technology and automation technology products against Siemens, Alstom, Invensys Plc, Emerson Electric Co, Schneider Electric and others.
ABB shares have dropped 70 per cent this year after a 63 per cent fall in 2001 as it posted a record 2001 loss and issued a profit warning while facing potentially crippling asbestos claims against its Combustion Engineering US unit.
The stand-by credit facility covers liquidity needs in 2003 and 2004, or more than the crucial 18 months during which new chairman and chief executive Mr Juergen Dormann wants to cut $800 million from the cost base and dispose of assets. The job total will be cut to below 100,000 from 146,000 posts.