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Halliburton to launch IPO for Kellogg by end of year

Share offering resumed after Halliburton announces only 10% of third-quarter profits came from KBR

Halliburton has resumed its plan to sell nearly 20% of its Kellogg, Brown and Root (KBR) arm through an IPO by the end of the year.
Dave Lesar, chairman and chief executive of Halliburton, announced the news during a conference call last week.

“If we are able to finalise the SEC (US Securities and Exchange Commission) review process with respect to the form S-1 within the next few weeks, we expect to complete an IPO of just under 20% of KBR’s outstanding shares,” explained Lesar. Form S-1 is the registration statement required in IPOs.

The IPO of KBR was stopped in July of this year after Halliburton cited a weak and uncertain IPO market.

KBR is the engineering and construction arm of Halliburton and the government’s largest private contractor in Iraq.

Lesar said the rest of the shares in KBR would be distributed to shareholders by April 2007. The shares generated about 40% of Halliburton’s revenues but only 10% of its profits in the latest quarter.

If the company cannot complete the SEC process soon it will separate the unit by distributing the shares to stockholders without the IPO.

The resumption of the sale came just before the company announced its third-quarter earnings. The income rose to US $615 million, an increase of $123 million compared to last year.

Consolidated revenue in the third quarter of 2006 was $5.8 billion, up 19% from the third quarter of 2005. This increase was largely attributable to higher activity in the Energy Services Group (ESG).

Consolidated operating income was $680 million in the third quarter of 2005. The ESG benefited from increased customer activity and pricing gains. Operating margins at ESG were their highest ever at 26.7%.

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