In keeping with a desire to separate from its Kellogg, Brown, and Root unit, Halliburton Co. will hold an initial public offering for a 20% stake in the construction giant after March 31.

Houston-based Halliburton first expressed interest in separating from KBR in 2004. The unit reported $10 billion in 2005 revenue, but has been under fire for its logistics and construction work in Iraq. KBR is now under probe for bribery charges related to a liquefied natural gas facility in Nigeria.

The decision to move forward with the sale stems from a boost in 2005 KBR earnings over 2004 and to more positive trends for E&C firms on Wall Street, says Dave Lesar, Halliburton CEO. “We believe the IPO market in general and the public market for engineering and construction companies in particular is very attractive,” he says.

Despite the IPO, Halliburton is not closing the door on divesting portions of KBR. “In response to interest we receive, we may consider selling pieces of KBR, but we would not expect such sales to change our IPO plans,” says C. Christopher Gaut, Halliburton chief financial officer.

Industry observers predict the IPO will not be impeded by KBR’s Iraq controversies, noting the firm’s other work in energy-related construction, particularly liquefied natural gas terminals.