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Halliburton to spin off controversial unit

Halliburton Co. said Friday it plans to spin off a minority stake in its engineering and construction unit KBR, which has generated enormous controversy over how it has become the largest U.S. contractor in Iraq. Its shares rose nearly 6 percent.
/ Source: The Associated Press

Halliburton Co. said Friday it plans to spin off a minority stake in its engineering and construction unit KBR, which has generated enormous controversy over how it has become the largest U.S. contractor in Iraq. Its shares rose nearly 6 percent.

Halliburton, whose chief executive was Vice President Dick Cheney from 1995 to 2000, has been criticized since the beginning of the war in Iraq for multibillion-dollar government contracts. Halliburton is an oilfield services company based in Houston.

The KBR unit posted $3 billion in overall revenue in the fourth quarter.

Halliburton President and CEO Dave Lesar told analysts the company will file for an initial public offering of shares in KBR with the Securities Exchange Commission.

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

Halliburton chief financial officer Cris Gaut said the plan is to spin off a minority stake in the engineering unit with the parent company holding on to the rest.

"Our plan at this point is a 20 percent IPO of KBR; however, in response to interest we have received, we may consider selling some pieces of KBR, but we would not expect such sales to change our IPO plans," he said.