By OGJ editors
HOUSTON, Mar. 9 -- Kerr-McGee Corp., Oklahoma City, plans to sell or spin off its chemical business, the world's third-largest producer and marketer of titanium dioxide.
Separation of the chemical business will allow Kerr-McGee to better focus on its core competencies in exploration, exploitation, development, and production, executives said. There is no time schedule yet for the divestiture, a company spokeswoman said.
Kerr-McGee's chemical unit has gross production capacity of 624,000 tonnes/year of TiO2, an inorganic white pigment used in paint, coatings, plastics, and paper.
Separately, Kerr-McGee plans a $1 billion share repurchase program. The timing and final number of shares to be repurchased will depend in part on the outcome of the chemical business separation, the company said.
Banc of America Securities analyst Robert S. Morris, New York, said the sell or spinoff of the chemical business was expected. He estimated its value at $1.7-$1.9 billion.
Standard & Poor's Rating Services., New York, cut Kerr-McGee's corporate credit rating to "BBB-minus," the lowest investment-grade rating. Previous, the rating was "BBB."