Xerox Sells Existing Nordic Lease Receivables for $370 million
Press release from the issuing company
STAMFORD, Conn., April 4, 2001 -- Xerox Corporation (NYSE: XRX) today announced an agreement with a financing partner to provide on-going, exclusive equipment financing to Xerox customers in Denmark, Sweden, Finland and Norway. Xerox is selling its existing portfolio of lease receivables for these countries to the partner for approximately $370 million in cash with $285 million received today.
"Today's announcement is the first important step in the company's plan to transition customer equipment financing to third-party vendors," said Paul A. Allaire, chairman and chief executive officer. "The combination of exiting equipment financing, asset sales and operational cash improvements is at the core of restoring the financial strength of Xerox."
Allaire also confirmed that the completion of this transaction raises Xerox's current worldwide cash balance to approximately $3.1 billion available to meet financial obligations.
In October of last year, Xerox announced its plan to move to third-party equipment financing as part of its turnaround plan. Over time, this is expected to remove as much as $11 billion in equipment financing-related debt from the Xerox balance sheet. The company also confirmed that negotiations continue with several potential vendors in other countries, including the United States, to complete this transition.
"This partnership both enhances Xerox's liquidity and guarantees that Xerox's Nordic customers continue to receive the financing services they require when purchasing any of Xerox's wide range of innovative products," said Barry D. Romeril, Xerox chief financial officer. "Our financing partner's purchase of Xerox's Nordic lease receivables for essentially full value exemplifies the quality of Xerox's existing portfolio. The landmark agreement is a clear indication of the company's progress in executing on one of the key elements of our turnaround strategy. "
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