Loading ...
Sorry, an error occurred while loading the content.

Halliburton to sell KBR

Expand Messages
  • Greg Cannon
    http://www.theaustralian.news.com.au/common/story_page/0,5744,17975097%255E36375,00.html Halliburton will hive off KBR unit Sheila McNulty, Houston January 30,
    Message 1 of 1 , Jan 29, 2006
    • 0 Attachment
      http://www.theaustralian.news.com.au/common/story_page/0,5744,17975097%255E36375,00.html

      Halliburton will hive off KBR unit
      Sheila McNulty, Houston
      January 30, 2006

      HALLIBURTON, the world's largest diversified energy
      services, engineering and construction company, says
      it is ready to spin off and list its KBR unit, which
      is the US's biggest private contractor in Iraq, and
      may also consider selling some pieces of KBR outright.

      The decision to list 20 per cent of KBR, which had
      been expected, comes as Halliburton reported the best
      annual figures in its 86-year history. It earned
      $US2.4 billion ($3.2 billion), or $US4.54 per share,
      in 2005, compared with a full-year net loss of $US1
      billion, or $US2.22 per share, in 2004.

      Its overall gains were driven not only by KBR but also
      its Energy Services Group, which has benefited from
      increased use of its crews and assets amid an industry
      scramble for oil and gas resources in the high-priced
      environment.

      Halliburton is eager to separate itself from KBR,
      which, despite bringing in billions of dollars from US
      military contracts in Iraq, has plagued the parent
      company with controversy since the war began.

      Not only was KBR accused of overcharging for services,
      but critics said KBR was being favoured by the US
      Government for contracts because US Vice-President
      Dick Cheney used to run Halliburton.

      Even though Halliburton has denied any wrongdoing, the
      controversy has dogged it. The company had to wait to
      hive off KBR because the unit was caught up in a
      bankruptcy restructuring as part of the company's $US4
      billion asbestos settlement.

      Halliburton president, chairman and chief executive
      Dave Lesar said Halliburton planned to file for an
      initial public offering for KBR soon after filing its
      10-K financial form with regulators, which should be a
      matter of months.

      "We believe the IPO market in general, and the public
      market for engineering and construction companies in
      particular, is very attractive, and a public valuation
      of KBR would benefit Halliburton's stock price, Mr
      Lesar said.

      Valuation multiples of publicly traded engineering and
      construction firms are currently very favourable.
    Your message has been successfully submitted and would be delivered to recipients shortly.