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ITT SIGNS AGREEMENT TO DIVEST DOMESTIC UNSECURED CONSUMER SMALL LOAN PORTFOLIO

 NEW YORK, May 5 /PRNewswire/ -- ITT Corporation (NYSE: ITT) announced today a preliminary agreement for the sale of the ITT Consumer Financial Corporation's (CFC) domestic unsecured consumer small loan portfolio. The purchasing group was arranged by Goldman, Sachs & Co., and will include an affiliate of that investment banking firm as the lead investor. This portfolio had a face value of $2.18 billion as of February 28, 1993. The transaction excludes the CFC Caribbean Basin and Panama operations.
 The sale is expected to close on June 1.
 According to the agreement, ITT will retain a 15 percent equity position in the new group and will receive about $1.7 billion in cash including loan payments collected between February 28 and the closing date expected to approximate $400 million.
 ITT expects to report a gain in the second quarter, which will be based on recorded values as of the closing date and certain costs and restructuring expenses to be incurred by ITT as part of the transaction.
 ITT has agreed to service the portfolio, on a fee basis, until the new group assumes this responsibility. Household International will service the loan portfolio through its Household Finance (HFC) subsidiary and will take a 25 percent equity stake in the new group.
 Last January, ITT announced the transformation of CFC to reduce its business in the domestic unsecured consumer loan area and to aggressively pursue growth opportunities in secured lending. At that time, CFC's parent company, ITT Financial Corporation, established additional reserves of $796 million to cover future unsecured consumer loan losses for the run-off of its existing portfolio and for consolidation of loan offices.
 "This sale accelerates the transformation of CFC. We feel that the steps we took earlier this year provided the opportunity for this transaction, which maximizes the shareholder value of the loan portfolio through sale rather than liquidation," said Rand V. Araskog, chairman, president and chief executive of ITT. "The transaction is in line with ITT's efforts to focus management's attention on strategic assets," Mr. Araskog concluded.
 The sale is subject to required regulatory approval and to the negotiation and execution of definitive agreements.
 -0- 5/5/93
 /CONTACT: Jim Gallagher of ITT, 212-258-1261/
 (ITT)


CO: ITT Corporation ST: New York IN: SU: TNM

SB -- NY017 -- 4700 05/05/93 08:10 EDT
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Date:May 5, 1993
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