| BUSINESSWEEK ONLINE : MARCH 5, 2001 ISSUE | |||||
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| COVER STORY
Xerox' Dire Finances The loss of $38 billion in shareholder wealth already qualifies Xerox as a corporate catastrophe. And the company's troubles are not over yet--not by a long shot THE PROBLEM -- Xerox' total debt is $17 billion, including a $7 billion credit line it exhausted late last year after it was unable to roll over its commercial paper. -- $2.6 billion in debt comes due this year, including $500 million in March and another $900 million in the second quarter. -- Cash on hand is only $1.7 billion, up from a razor-thin $154 million in September. -- Operations historically consume $700 million to $1.1 billion in the first two quarters. THE RESPONSE -- Management says that by yearend it will slash annualized costs by $1 billion, partly through recently announced layoffs. -- Xerox also hopes to raise as much as $4 billion by selling assets. To date, it has raised only $550 million, by selling its operation in China. -- The company borrowed $435 million, secured by European receivables, from GE Capital. -- Xerox is trying to raise $500 million in equity from a mer-chant bank, according to people familiar with the situation. THE ODDS Can Xerox avoid Chapter 11? Moody's analyst Richard J. Lane doesn't expect a filing, at least in the first half of the year. Still, he adds: ''I can't rule anything out.'' Even if Xerox manages to limp through 2001, it faces larger challenges next year. That's when the $7 billion it tapped last fall comes due. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Xerox: The Downfall COVER IMAGE: Xerox: The Downfall TABLE: Xerox' History: The Highs and Lows CHART: Xerox Lost Its Hold On Copiers...And Flubbed Desktop Printers... TABLE: Xerox' Dire Finances Commentary: Shhh! You'll Wake the Board TABLE: Where Were They? INTERACT E-Mail to Business Week Online |
