Marathon planning $2.5 billion-$3 billion of debt with spinoff plans

By Jennifer Chiou

New York, Jan. 13 - Marathon Oil Corp. announced that it has plans to incur new debt of $2.5 billion to $3 billion with its board's approval of the planned spinoff of its downstream business.

That financing will be used to establish a minimum $750 million initial cash balance for Marathon Petroleum Corp.

The spinoff involves the creation of two independent energy companies, with Marathon Petroleum to be based in Findlay, Ohio. The company is expected to be the fifth largest U.S. refiner.

Marathon Oil will continue to be based in Houston.

All cash above that cash balance level will be used to repay existing intercompany debt with Marathon Oil, according to a company news release.

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