Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 6, 1995 TAG: 9507060055
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Bloomberg Business News
DATELINE: LENGTH: Medium
The filing comes two days after the struggling company hired a turnaround firm. In the past few months, Smith Corona has slashed its work force, violated its credit agreement, reported a third-quarter loss and suspended its dividend payments.
The company, the last U.S. typewriter maker, said it sought Chapter 11 protection from creditors during financial reorganization in order to line up additional financing and carry out a plan to cut its workforce by 26 percent.
``Our first priority is to stabilize our operations in the very short term,'' Chief Executive Ron Stengel said in a statement.
In a Bankruptcy Court hearing Wednesday, the New Canaan, Conn.-based company said it would need about 30 to 40 days ``breathing room'' to determine if it will be able to salvage any parts of its operations or if it will liquidate its entire business.
The company also makes personal word processors and other office equipment.
Smith Corona, for years an industry leader in typewriters, has been hurt as personal computers have become more widespread and more affordable.
The company's common stock, traded on the New York Stock Exchange, closed Wednesday at $1.50 a share, unchanged from Monday's trading.
The company said none of its subsidiaries or foreign affiliates were included in the bankruptcy filing, which it made in federal court in Delaware, where it's incorporated.
The company listed assets of $207.9 million and liabilities of $198.9 million. Of the liabilities, $13.6 million are listed as secured debt.
The company's 20 largest unsecured creditors, listed in the petition, were mainly trade creditors. The largest creditor listed was Mitsumi Electric Corp. of San Francisco, with a claim of $805,000.
Smith Corona said it had obtained a loan commitment for $20 million, which will need approval in Bankruptcy Court. That loan, along with existing financing, will be enough to fund the company's operations during a reorganization, it added.
The filing also comes as the company's majority shareholder, Hanson Plc, is considering selling its 40 percent stake. Hanson had planned to include Smith Corona in U.S. Industries when it created that consumer products company last month.
by CNB