Business Week: August 30, 1999
More Angst over Zenith
Anyone remember Zenith Electronics? The last U.S.-owned TV maker has had heavy losses for 13 of the past 14 years. South Korea's LG Electronics, which owns 55% of Zenith, wants to file for a packaged bankruptcy on Aug. 20. That would wipe out minority shareholders, while giving bondholders 50 cents on the dollar and 100% ownership to LG.
But some shareholders, led by the California Public Employees' Retirement System, which holds 1 million shares, are raising a stink. Determined not to lose their investment, they say the ''new'' Zenith, an R&D, sales, and marketing company, could be worth more than the $309 million that a bank says it's worth. They want the bankruptcy court to sell Zenith, although LG said it has tried. The company says 15 other parties were given a chance to acquire Zenith. None was interested. ''It's appropriate to have a formal auction to see if there's more value,'' says Wilbur Ross, a managing director of shareholder adviser Rothschild.
Zenith says that when it is restructured, it will make money--$500,000 on sales of $935 million in 2001. Shareholders still aren't happy.
Hey, maybe they should just offer the company on eBay instead.
By Richard A. Melcher |
