Xerox Completes Sale of China Operation to Fuji Xerox

STAMFORD, CT-Xerox Corp., which is enduring financial difficulties and engaging in a multi-billion dollar cost reduction effort, reports it has completed the sale of its China operations to Fuji Xerox Co. Ltd. for $550 million in cash. The company also reported on Dec. 20 that it expected “a softer fourth quarter performance.” Xerox had previously announced its intent to sell the China operations to Fuji Xerox as part of a $2 billion to $4 billion cost reduction program.

“Closing the sale of our China operations to Fuji Xerox is the first in a series of asset dispositions that are a key element in our plan and designed to restore a sound financial foundation to the business,” said Paul A. Allaire, Xerox chairman and chief executive officer.

Xerox said it has drawn down the remaining balance of its $7 billion revolving credit agreement, a portion of which had been used to repay maturing debt. The company’s current cash balance is approximately $1.4 billion, considerably higher than the $154 million available as of Sept. 30. Xerox officials indicate that the $550 million from the sale of its China operations are part of the company’s current cash balance.

“These activities further strengthen Xerox’s liquidity,” said Allaire. “As we said when we announced our agreement to sell the Xerox China operations, our asset dispositions are on track and ahead of schedule and our cost reduction program is on track. And while we are confident for a turnaround in 2001, our fourth quarter performance is likely to be softer than the third quarter, especially in light of the current economic environment.”