Xerox poo-poos bankruptcy claims
Has enough cash to stay out of Chapter 11
Troubled Xerox today denied it is planning to seek Chapter 11 bankruptcy protection, despite hiring a New York investment firm specialising in bankruptcies.
The New York Post today claimed that was precisely why loss-making and debt-laden Xerox had sought the help of the Blackstone Group.
Not so, replied Xerox. "Xerox has no plans to file for bankruptcy," said a company spokeswoman, cited by Reuters. Xerox has $1.4 billion in cash, sufficient, the spokeswoman said, to "meet our current and anticipated needs".
She didn't mention, however, that the company has around $18 billion in debt, a fact Xerox was forced to admit last October. It is currently developing a turnaround plan which will see $1 billion cut from the company's operating costs and the sale of $2-4 billion worth of assets.
Even Xerox's famous hot-house R&D facility, the Palo Alto Research Center, is said to be considered a candidate for a sell-off. Xerox recently said it was "actively engaged in discussions to sell the company's China operations, a portion of the Xerox ownership in Fuji-Xerox, Xerox Engineering Systems, and its interest in spin-off companies, such as ContentGuard and Inxight".
As for the Blackstone relationship, Xerox admitted that it has indeed engaged the firm, but would not say what its role is. It simply described the investment firm as "general financial advisors".
The company has lately been embarrassed by tanking share values, losing nearly 80 per cent from its 52-week high of $27, and last month's credit-rating downgraded by Moody's Investor Services. The company has been aggressively selling off assets in an attempt to maintain liquidity, and insists that this strategy is working beautifully.
Xerox owes Citigroup and Bank One $375 million each, and FleetBoston, $350 million. JP Morgan Chase is their biggest creditor at $750 million, the Post reports. No doubt all will be relieved to hear that the company's finances are on track despite appearances. ®
Thomas C Greene contributed to this report.