UPDATE 2-Siemens Healthineers on track for March IPO

* Flotation planned on Frankfurt stock exchange

* Siemens to offer investors existing Healthineers shares

* Halving Healthineers’ debt to give it flexibility

* Siemens says to float “significant” minority stake (Adds details in timing, debt)

FRANKFURT, Feb 19 (Reuters) - German engineering group Siemens on Monday announced plans to float its medical imaging and diagnostics business Healthineers on the Frankfurt stock exchange, putting it on track for a listing in late March.

Siemens said the initial public offering (IPO) was due some time in first half of 2018, but the so-called “intention to float” statement typically sets up companies to go public about four weeks later.

All proceeds from the Healthineers offering will go to parent Siemens, according to Monday’s statement, which confirmed a Reuters report from last week.

But cancelling or paying back about half of Healthineers’ debt of currently more than 8 billion euros ($9.90 billion) will boost the division’s financial firepower.

This “will provide financial flexibility to capture opportunities”, Siemens said in the statement.

The IPO is expected to value the maker of medical imaging and diagnostics gear between 35 billion and 40 billion euros ($44-$50 billion), which would make it Germany’s biggest listing since the privatisation of Deutsche Telekom in 1996.

The announcement comes as global equities rebound from a tumultuous start of the month.

“Siemens Healthineers is now ready for its market debut,” Michael Sen, chairman of the Healthineers supervisory board and member of the Siemens managing board said in a statement.

German trains-to-turbines group Siemens said it plans to list a “significant” minority stake of Healthineers, without specifying how many shares it would offer.

Sources told Reuters last week that Siemens would likely sell 15 to 20 percent in Healthineers as part of the transaction.

Investment banks Goldman Sachs, Deutsche Bank and JP Morgan will act as joint global coordinators for the listing, helped by BNP Paribas, BofA Merrill Lynch, Citigroup and UBS.

Berenberg, Commerzbank, HSBC, Jefferies, Nordea, RBC and UniCredit have been appointed as Co-Lead Managers.

Healthineers, which competes with businesses of Philips and General Electric and increasingly with a host of smaller technology companies, plans a dividend ratio of 50 to 60 pct of net profit once it is listed, Siemens said. ($1 = 0.8065 euros) ($1 = 0.8083 euros) (Reporting by Edward Taylor and Maria Sheahan; Editing by Georgina Prodhan)