Speculation mounts over Polaroid bankruptcy filing
By Tim McLaughlin
BOSTON, Oct 10 (Reuters) - Shares of Polaroid Corp. (NYSE:PRD - news), the beleaguered maker of instant film and cameras, did not trade on Wednesday as speculation mounted it would seek bankruptcy protection from creditors.
A Polaroid spokesman did not know if the stock would open for trading on Thursday.
``The decision not to open trading (on Wednesday) was made by the stock exchange in consultation with Polaroid,'' company spokesman Skip Colcord said. ``And we don't have any more comment on that.''
For now, Polaroid is saying it continues to seek a number of strategic alternatives to satisfy creditors. Polaroid is the No. 1 maker of digital cameras for the mass merchandising market.
``I think it would be a good thing for the company if they did (file for bankruptcy),'' said one Polaroid employee outside the company's headquarters in Cambridge, Massachusetts. ``Only a few people know (what's going to happen) and they're not telling us.''
The employee, who declined to give his name, said Polaroid still has valuable assets such as its identification business for state motor vehicle bureaus, instant film and a raft of patents.
Industry analysts have expected Polaroid to seek bankruptcy protection after the firm's stop-gap measures, such as selling real estate and slashing jobs, failed to free up enough cash to meet debt agreements this summer.
The stock, which reached an all-time high of $60.31 in July 1997, closed at 28 cents Tuesday on the New York Stock Exchange, down 98 percent in the past year.
Founded in 1937 by Edwin Land, a brilliant Harvard University dropout, Polaroid owes about $600 million to holders of its bonds and about $350 million to two groups of banks. Polaroid's management has been pressing for a loan of about $100 million. But people familiar with the negotiations said Polaroid would get substantially less.
Polaroid has not had less than $600 million in debt for the past decade, Colcord said.
Polaroid missed interest payments in July and August to bondholders and hired investment bankers to explore strategic alternatives, including selling all or part of the company.
The bondholders organized to protect their own interests as Polaroid executives put together a business plan in an attempt to secure additional financing.
The Sept. 11 attacks on the United States also have made people less likely to travel, reducing consumer enthusiasm for buying cameras and film.
Polaroid received waivers from its U.S. and European bank groups through Oct. 12. This allowed the company to proceed with restructuring moves.
Polaroid posted an operating loss of $52 million in the second quarter, including $16 million in one-time charges for liquidating discontinued product lines. Net sales dropped sharply to $333.5 million, from $485.6 million in the year-ago quarter. |
