Zurich-based engineering group ABB is reportedly set to sell a large part of its leasing and financing portfolio to a unit of General Electric Co (GE).

The move is part of a plan by ABB, the biggest electrical engineering group in Europe, to slash its debts.

A transaction in which GE capital would acquire about 80 per cent of the SFr7 billion ($4.6 billion) leasing and portfolio held by ABB structured finance could be announced as early as Tuesday, according to sources quoted by Reuters.

But there would have to be no anti-trust objections for the deal to go ahead.

ABB spokesman, Wolfram Eberhard, said the planned sale of all or most of Structured Finance - a key part of the company's plan to combat its huge debts - was progressing according to plan.

One close source quoted by Reuters said ABB was likely to sell at a discount of ten per cent to the book value of the portfolio. Another has said that the deal would make a good "strategic fit" and would be a step towards improving the group's financial health.

Tough times

The news follows on from a tough year for the Swiss company, which has faced asbestos litigation bad sales and a public fight with two former chief executives over pension payments.

The sale of Structured Finance, a service that provides financial advice, infrastructure financing and export financing and leasing, should help ABB in its goal of halving its debt to SFr4 billion by the end of the year and restore investor confidence.

Analysts said that even if the unit is sold for a low price, the deal would still alleviate debts by more than $1 billion.

ABB's debts have risen to SFr8 billion during the first half of the year.

swissinfo with agencies

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