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TRW to sell four units
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May 17, 1999: 8:49 a.m. ET
Parts maker to apply up to $1.5B in proceeds to LucasVarity deal
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NEW YORK (CNNfn) - TRW Inc. said Monday it will divest four of its automotive operations to help reduce the debt it incurred from its $6.6 billion purchase of auto parts maker LucasVarity.
TRW will sell its engine businesses -- TRW Engine Components and Lucas Diesel Systems Operations -- as well as TRW Nelson Stud Welding and the LucasVarity Wiring companies.
The Cleveland-based parts maker for the automotive, aerospace and information systems markets said it expects proceeds from the sales to net between $1.2 billion and $1.5 billion.
Including an $85.4 million LucasVarity-related charge, TRW reported a first-quarter loss of $28.4 million, or 24 cents a diluted share.
With the help of the divestiture proceeds, the company said it plans to reduce its net debt by approximately $2.5 billion over the next 18 months.
"Debt reduction is an immediate priority for TRW," said Joseph T. Gorman, chairman and chief executive officer, in a statement. "Exiting these businesses will contribute significantly to the timely achievement of that goal."
Gorman added that the company has already been approached about selling the businesses and said he is confident TRW will find buyers and complete the sales by the end of 1999.
With the divestiture of the four units, the company said its automotive operations will focus on integrated vehicle control, including steering, suspension and antilock brakes; safety restraints such as seat belts and air bags; and related electronics.
On Friday, shares in TRW (TRW) closed down 3/16 at 47-1/8. 
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