Industrial engineering group ABB ,selling assets to cut a debt mountain as it nears a vital asbestos liabilities settlement, is making progress in talks to sell its oil, gas and petrochemicals division, a source said on Friday.
The sale, seen worth more than $1.5 billion, could be announced as soon as March, an industrial source said.
An announcement is likely after ABB posts 2002 results and completes a $1.2 billion U.S.asbestos liabilities settlement for its Combustion Engineering Inc unit, the source said. These are both due by end-February.
“ABB is working full steam and the number of possible buyers is limited, so a deal can be cut relatively soon,” the industry source said.
ABB is selling assets to cut a $9.0 billion mountain of debt, on an equity base of $1.8 billion, as of end-September. It also is striving to slash $800 million from costs in a battle for profitability despite adverse markets.
The company had no comment on the talks beyond saying that it planned the sale to take place before the end of 2003.
“We are under no time pressure,” said a spokesman.
The energy division supplies products, systems and services to energy groups ranging from well-heads in exploration to offshore oil platforms and catalyser production in refineries.
The sale would cut ABB’s job total by 12,000 and bring it closer to its goal of employing 100,000 people, reduced from 146,468 in September.
Details of several thousands job cuts, announced in October, also could be revealed in the run-up to the 2002 results due on February 27. Staff in Germany, a key market for ABB where the economy remains sluggish, could figure prominently on this list.
ABB is expected to report another loss for 2002, after a record $691 million loss for 2001, due to charges for asbestos and other items.