CI Financial Corp. has the started process for taking public its US wealth-management unit, a key step in its plan to reduce debt and separate its Canadian and U.S. businesses.  

The U.S. division, which manages about $183 billion (US$134 billion) in client assets, has confidentially submitted a draft registration statement with the Securities and Exchange Commission for an initial public offering, according to a statement Thursday. 

“The company is making the announcement at this time to be responsive to numerous requests for an update on the status of the submission, the content of which remains confidential,” Toronto-based CI said in the statement. It hasn’t decided how many shares to sell or at what price. 

CI Financial plans to use proceeds from the IPO to improve its balance sheet, which had nearly $4 billion (US$3 billion) in debt as of Sept. 30. CI has said it will no longer use the cash from its Canadian business to fund acquisitions for the U.S. arm. 

The fund manager’s borrowing, built up as it went on an acquisition spree of U.S. registered investment advisory firms over the past few years, has become an issue for analysts and investors. Last month, CI sold $400 million worth of bonds at a yield of 7 per cent, similar to the yield seen in another company’s junk-rated debt deal around the same time. CI is still rated investment grade by S&P Global Ratings; it’s BBB- with a negative outlook. 

CI shares fell 1 per cent to $13.61 in Toronto on Thursday. They’re down about 48 per cent this year.