PricewaterhouseCoopers, the world's largest accounting firm, is to sell its consulting arm through an initial public offering - and the new business will be based in Bermuda.

The company has decided to spin the part of the business off following concerns over potential conflicts of interest between its auditing and consulting businesses following the collapse of Enron.

The new Bermuda company will be called PwCC Ltd, and would be the fourth of the five big consultants to take advantage of investor demands for their businesses which has been more profitable than the accounting side.

The company will be sold off at an initial public offering "as soon as practicable" after lodging the filing with the Securities and Exchange Commission on May 5.

It is not known if there would be a physical presence on the Island for the firm, which was previously known as PwC Consulting and has 32,000 employees world wide and offices in 52 countries, as calls to the Hamilton offices were not returned by Press time.

The filing with the Securities and Exchange Commission on May 2, gives the company's address as Clarendon House, 2 Church Street, Hamilton - the offices of law firm Conyers Dill and Pearman.

The registration states that before the offering, the prospectus for the new firm will be filed with the Registrar of Companies in Bermuda.

The company will separate from the PricewaterhouseCoopers network of firms as soon as the public offering is closed.

According to the filing, the company was incorporated under the laws of Bermuda on March 27, 2002 and expect to change their name in late June or early July this year.

"Going public makes sense for a number of reasons," said Natalie Walrond, an analyst at Pacific Growth Equities. "Certainly the timing makes sense because there's concern about the conflicts of interest."

Officials familiar with the sale, which will be managed by investment bank Morgan Stanley, expect it could raise between $7.5 billion and $9 billion.

The company in a preliminary filing with the Securities and Exchange Commission said it would sell as much as $1 billion in Class A shares, though the size is often changed in subsequent filings once the valuation of shares and demand from investors are determined.

The sale comes amid pressure by government regulators to ensure auditors' independence from clients to whom they also provide business consulting services.

The pressure intensified following the collapse last year of Enron Corp., whose relationship with its auditor, Arthur Andersen LLP, is being investigated.

"The primary purpose of this offering is to ensure that we will no longer be subject to the rules and regulations governing the independence of auditors from their clients and to eliminate any perceived conflicts of interest," said the firm.

Entertainment giant The Walt Disney Co. (DIS.N), which uses PricewaterhouseCoopers as its auditor, earlier this year became the first major company to say it would separate auditing from consulting, challenging the belief that a single firm can play both roles objectively.

PwCC had $424 million of income before distributions to partners in the year ended June 2001, a 30 percent decline from the previous year. Income rose by 40 percent in the six months ended last December to $208 million.

Under an agreement with the SEC, partners and shareholders in PricewaterhouseCoopers can have no more than 20 percent of PwCC once the transaction is completed. The remainder are expected to be sold in the IPO or remain in the hands of partners in PwCC. Bermuda-based PwCC, said opportunities for new business with companies that were being audited by a PricewaterhouseCoopers firm began declining in 2000, long before the Enron debacle. The decline in business was due to auditor independence rules proposed by the SEC that required companies to disclose non-audit-related fees in annual statements, PwCC said in the filing. Those rules became effective in early 2001.

PwCC said it plans to use the proceeds from the IPO, through a subsidiary, to pay separation and transaction expenses and buy PricewaterhouseCoopers management consulting and technology services businesses in some countries. It also plans to use the funds for general corporate purposes.

The company two years ago was in advanced - but ultimately fruitless - talks to sell its consulting unit to Hewlett-Packard Co. for about $18 billion.

PwCC will not receive any proceeds from selling shareholders. It is seeking to list its shares on the New York Stock Exchange but did not provide a proposed ticker symbol.