Reuters: Deals: United Tech to sell units to fund Goodrich deal

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United Tech to sell units to fund Goodrich deal Mar 15th 2012, 17:23 NEW YORK | Thu Mar 15, 2012 1:23pm EDT NEW YORK (Reuters) - United Technologies Corp (UTX.N) plans to sell its Rocketdyne, Clipper Wind and some of Hamilton Sundstrand's pump operations, deals that will raise about $3 billion to help fund its pending takeover of Goodrich Corp (GR.N). It plans to fund the $16.5 billion Goodrich deal -- its largest ever -- with $2 billion to $3 billion in short-term debt, $6 billion to $7 billion in long-term debt and $1.5 billion in convertible notes. The world's largest maker of elevators and air conditioners disclosed those plans ahead of a meeting with investors on Thursday. When the Hartford, Connecticut-based company first disclosed its plans to buy Goodrich, it said it could sell up to $4.6 billion in shares to fund the takeover, but in recent months had indicated that it aimed to lower that amount. The company has been doing a balancing act in determining how many shares to issue. Chief Executive Louis Chenevert in December told investors that he "hate(s)" issuing new shares, in no small part because doing so reduces the per-share earnings figures that Wall Street watches closely. At the same time, if the company paid out too much of its cash or takes on debt to fund the deal, it could imperil its credit rating. Moody's Investors Service last month cut its outlook on United Tech's "A2" debt rating to "negative" from "stable," citing its reluctance to sell shares. That poses another risk for the company. Chief Financial Officer Greg Hayes said that keeping a high rating is important for the company because it needs daily access to the commercial paper market, where companies borrow cash for short periods of time to cover operating expenses. United Tech shares were off 15 cents at $86.66 on the New York Stock Exchange. (Reporting By Scott Malone; Editing by Maureen Bavdek and Phil Berlowitz) Link this Share this Digg this Email Reprints

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