Arco petrochemical unit may go public

Aiming to raise needed cash, Atlantic Richfield is considering spinning off Lyondell Petrochemical (LPC), its wholly owned and separately incorporated subsidiary, into a publicly held company. Arco announced last week that it is considering the initial public offering of about 50% of the unit. It would continue to own the remaining shares. LPC is a major producer of ethylene, propylene, and methanol at its Channelview, Tex., plant. It also produces gasoline and other petroleum products at a Houston refinery. In the first nine months of this year, LPC boasted after-tax earnings of $378 million, a 397% increase over the first three quarters of last year. The planned transaction is reminiscent of Arco's spin-off of 20% of Arco Chemical, its intermediate chemicals unit, in 1987. This move raised more than $590 million. Analysts estimate that public sales of LPC stock could reap for Arco as much as $1.5 billion. To raise further capital, Arco is also ...