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16 Nov 06. The FT reported that shares of KBR, the engineering and military services unit of Halliburton that ignored calls from the UK’s Ministry of Defence to postpone its float, soared as much as 25 per cent on their debut on the New York Stock Exchange on Thursday after pricing at the top of their forecast range.

The MoD wanted the float delayed to give it time to determine the financial viability of KBR, which owns 51 per cent of the Devonport naval shipyard in Plymouth, western Europe’s largest naval dockyard.

In the first nine months of the year, KBR made almost half of its operating profits from Devonport, where Britain’s nuclear submarine fleet is refitted and refuelled.

Halliburton was eager to launch its offering at an advantageous moment in the market, but the MoD said it needed until the end of the month before it would conclude its assessment of KBR.

Shares in the company, formerly known as Kellogg Brown & Root, closed at $20.75, up 22 per cent to $3.75 on Wednesday’s offering price of $17. They reached $21.31 earlier in the day.

The company raised $473m by selling 27.8m shares at $17 compared with a forecast range of $15 to $17, giving an initial market capitalisation of about $2.8bn.

Halliburton has been trying to split off the KBR unit, which has faced investigations into alleged overbilling concerning its contracts in Iraq, for some years to concentrate on its more lucrative oil services business.

KBR has often been viewed as a political liability for Halliburton, which was led from 1995 to 2000 by Dick Cheney, US vice-president.

In an emergency filing to the Securities and Exchange Commission, Halliburton said the MoD had asked on November 13 for the KBR offering to be withdrawn.

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