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Technology Stocks : C-Cube

CUBE 36.82

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To: John Rieman who wrote (33387)	5/23/1998 11:06:00 AM
From: BillyG	Read Replies (1) of 50808

LG will buy 100% of Zenith out of Chapter 11............... techweb.com LG Reverses Position On Zenith, Raises Stake To 100 Percent (05/22/98; 1:49 p.m. ET) By Jack Robertson, Electronic Buyers' News Just two days after saying it was considering selling its 55 percent stake in Zenith Electronics, Korea's LG Electronics reported late Thursday night that it would instead acquire 100 percent of Zenith Electronics. LG will take over the U.S. company's TV set plants in Mexico, and provide an additional $60 million in credit. Zenith [ZE] officials also disclosed they intend to file for a Chapter 11 reorganization under bankruptcy proceedings, an action both they and LG earlier in the week denied they would take. Buyers or alliances are also being sought to take over Zenith's cathode-ray tube television tube manufacturing plant in Melrose Park, Ill. The restructuring essentially closes out Zenith's own consumer electronics manufacturing operations. The company in the future will continue to market products under its own label, but these will be acquired from LG and other sources. About $200 million in existing Zenith obligations to LG will be converted to common stock in the reorganized company, which will then give the Korean company 100 percent ownership. Zenith will be operated as an LG Electronics subsidiary with Jeffrey Gannon continuing to head the operation. Another $210 million in LG claims against Zenith will be exchanged to give the Korean company ownership of Zenith's TV set plants in Mexico. The restructuring is still subject to both companies achieving an unspecified amount of additional financing from other sources. Previously Zenith has said it needed $255 million additional money to continue operations for the rest of the year.

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