Paris

GENERAL Electric Co plans to spin off its healthcare business and divest its stake in oilfield-services provider Baker Hughes as chief executive officer John Flannery focuses the struggling company on power, aviation and renewable energy.

GE also will seek to reduce net debt by about US$25 billion by 2020, the Boston-based company said in a statement Tuesday, concluding a year-long strategic review. GE will sell 20 per cent of the health business and spin off the rest to its shareholders, while the stake in Baker Hughes will be sold over the next two to three years. GE shares rose 1.9 per cent to US$12.99 in pre-market trading.

The moves continue a radical reshaping of GE, which bears little resemblance to the conglomerate that used to count NBC, home appliances, plastics and a sprawling finance unit among its business holdings. In recent years, former CEO Jeffrey Immelt sold most of GE's banking and consumer operations, while Mr Flannery has already agreed to unload the century-old locomotive operations.

"GE will be a focused high-tech industrial company that will be easier for investors to follow and measure with a significantly improved balance sheet to support its remaining businesses," the manufacturer said in the statement.

The company will maintain its dividend through the health spin-off, GE said. After that, the company "expects to adjust the GE dividend with a target dividend policy in line with industrial peers". The health business makes imaging machines and other hospital equipment.

Investors have so far been cool to the new CEO's preliminary turnaround efforts, including cost cuts, management changes and internal restructuring. The shares fell 27 per cent this year through Monday, following a 45 per cent decline last year - a slump that led overseers of the Dow Jones Industrial Average to kick GE out of the blue-chip index it had been in for more than 100 years.

GE, an icon of American industry, has struggled to rebound from the financial crisis of 2008-2009. The stock has plunged from a peak of US$60 in 2000 and the company cut its dividend in 2009 and 2017.

GE plans to "materially shrink" the balance sheet of its finance arm, GE Capital, aiming to sell US$25 billion in energy and industrial finance assets by 2020. The company is also exploring options to reduce its insurance exposure.

GE shocked investors this year with a US$15 billion shortfall in insurance reserves. BLOOMBERG