ITT Speeds Up Plan to Divest, Schedules Sale of $1.7 Billion in Assets

ITT Corp., struggling to cut debt and ward off the threat of takeover, said Wednesday that it is “accelerating” its 5-year-old divestiture program and plans to sell about $1.7 billion in assets.

In a statement attributed to Chairman Rand V. Araskog, the New York conglomerate said it will sell some overseas insurance, publishing and educational-service units, as well as minority stakes in overseas telecommunications subsidiaries and its Sheraton hotel unit.

ITT said it also plans to sell “about 12” units in its ITT Industrial Technology Corp.--they were not identified by name--and remaining portions of its Eason Oil Co. subsidiary.

Last month, the company announced plans to sell most of Eason to Sohio Petroleum Co. and Sonat Inc. for a total of $240 million.

ITT refused to name most of the units that are for sale, but analysts said they probably include the O. J. Scott & Sons Co. lawn and garden products concern; Carbon Industries, a mining company; W. Atlee Burpee Co., a garden seed firm; Pennsylvania Glass Sand Corp., a maker of glass containers, and ITT Grinnell Pipe Co.

Keeping Core Businesses

ITT said it will not shed units in its core businesses: telecommunications and office products, insurance and financial services, aerospace, electronics and high-technology and automotive products.

The company, owner of the Hartford Insurance Group, also said its Rayonier forestry unit is not for sale because of depressed conditions in the wood and pulp products business.

Takeover rumors have swirled around the $20-billion-a-year conglomerate in recent months as it struggled to turn around declining earnings in most of its businesses. Last month, corporate raider Irwin L. Jacobs disclosed that he was accumulating shares of ITT stock.

ITT has declared several times its intentions to shed many of its units as a way to restore earnings and cut debt. Several analysts said the announcement was nonetheless significant as a pledge that management intends to push ahead with the program.

“They’ve moved from the realm of speculation to a commitment,” said Brian R. Fernandez of Nomura Securities in New York.

Taken as Positive Sign

He said the stock market also seemed to take the announcement as a positive sign, as witnessed by a rise Wednesday in ITT’s stock to $32.25, up $0.875, on volume of nearly 1.6 million shares. ITT stock was third most active in trading on the New York Stock Exchange.

Carol Neves, an analyst with the Merrill Lynch, Pierce, Fenner & Smith Inc. brokerage, said, however, that some on Wall Street may have expected ITT to include on the auction list some of its larger units, such as the Sheraton or Rayonier subsidiaries.

If cash from the sale of assets were entirely spent to reduce debts, ITT’s obligations of about $4 billion could be nearly cut in half, analysts noted.

But Araskog suggested that some of the proceeds might be used to allow ITT to buy other units for its core businesses. In the statement, he noted that ITT spent $190 million in 1983 and 1984 to expand into such businesses as electronic mail, fiber optics and telecommunications software.

He said ITT’s board might consider further acquisitions “if a major opportunity is identified which would further improve ITT’s financial structure while contributing to one of ITT’s key business areas.”