Fluor Will Sell $184 Million of Debt to Pay Bill for Back Taxes

Fluor Corp. said it expects to raise $184 million with two new debt offerings to help pay a multimillion-dollar back tax bill.

The Irvine engineering and natural resource firm said Monday that it arranged a private placement, handled by the Union Bank of Switzerland in Zurich, that should raise 150 million Swiss francs--or $84 million. The proceeds from the offering will be exchanged for seven-year, fixed-rate debt with an interest rate of 9.3%. Smith Barney, Harris Upham & Co. Inc. is the underwriter for the offering.

Last week the company announced a $100-million note offering as part of its effort to settle a bill from the Internal Revenue Service for back taxes. The interest rate on the seven-year notes is 9.5%. So far, the company’s tax bill comes to more than $140 million. But taxes for fiscal 1983 and 1984 have not yet been figured, a Fluor spokesman said. The spokesman would not rule out other tax-related debt offerings in the near future.

“I think it would be logical to assume that there would be more,” provided that subsequent offerings, together with the $184 million already arranged, do not exceed $250 million, the spokesman said. Earlier this month, Fluor said it filed a shelf registration statement with the Securities and Exchange Commission for the sale of up to $250 million in debt to be used to pay its IRS bill.