Xerox denies bankruptcy report

Xerox investors have not been strangers to bad news recently

Troubled photocopier giant Xerox has denied a report that it is close to bankruptcy.

The New York Post newspaper said Xerox had hired New York-based private investment firm Blackstone as a bankruptcy adviser.

But the office machines group said it had no plans to file for bankruptcy and Blackstone had been retained as "general financial advisers".

"We have $1.4bn in cash on hand and we believe our liquidity remains sufficient to meet our current and anticipated needs," Xerox spokesman Bill McKee said.

Shares down 80%

Xerox shares have lost almost 80% from their 52-week high, as the company has struggled to lift sales amid increased competition.

Last month, Xerox warned that profits would disappoint investors. Analysts have also expressed concern that the company might be running out of money.

A major restructuring in progress is intended to include the sale of $2bn-4bn in assets and a $1bn cost reduction programme.

Xerox has already sold its China operations to Fuji Xerox for $550m. The next move might be to sell 25% of Fuji Xerox to its Japanese partner Fuji Photo, analysts say.

That might release a further $1.2bn-1.4bn, they estimate.

All not lost

Some analysts say all is not lost for Xerox.

"Clearly, the programme is to sell off some more non-core assets," Ryan, Beck & Co analyst Peter Enderlin said.

"They have a lot of very strong products, a very good brand name, a very extensive worldwide sales and service organisation and a lot of assets that they can sell or deploy to improve their financial position."

Xerox shares closed down a further 8.8% at $5.813 on Tuesday.