Shares in FTSE 100 firm Melrose Industries have risen 10% today after it escaped criminal charges linked to a chemical incident in May.
The Birmingham-headquartered aerospace firm, which is listed in London, bought parts supplier GKN in 2018.
This summer, GKN’s Garden Grove site in California was evacuated after a ‘thermal issue’ was discovered in one of three tanks containing methyl methacrylate, a chemical used to manufacture high-strength aeroplane cabin windows. Once that was lifted, a restricted zone was kept in place around the facility.
The tank was decommissioned while Melrose said it had put in place safety improvements at the plant.
Despite reports estimating that the incident affected more than 50,000 nearby residents, investigations by the Orange County District Attorney’s Office found no injuries, leaks or contamination resulting from the incident. It has said that no criminal charges will be filed.
The firm is set to launch a $100m compensation scheme – remaining open into 2027 – which will “reimburse [residents and businesses] eligible for costs associated with the evacuation, including hotel stays, meals, transportation, loss of wages, and loss of use”.
Claims by emergency services agencies – as well as potential civil enforcement penalties – will be dealt with separately.
The plant produces and tests military canopies, cockpit windows and passenger windows for Boeing and Airbus.
Running at half its capacity since the incident has cost Melrose £6 million a month. It plans to resume full operations there before the end of September.
Melrose’s share price remains 17% down in the year to date.