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Archive for Thursday, July 12, 2001

Business Briefcase

July 12, 2001

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Camera, film maker exploring options to get back in black

Polaroid Corp. said Wednesday it would explore a merger or sale and said it had received a reprieve from lenders, as the camera and film maker tries to dig out from beneath a mountain of debt.

The company announced a waiver, good through Oct. 12, on a $363 million line of credit that was set to expire today, but said it would miss payments to bond holders next month. It now faces negotiations with bond holders to restructure that debt.

The company also has retained advisers to explore several options for the future of the company, including "a sale of assets, a merger or sale of the company, and/or a strategic partnership," said Polaroid spokesman Skip Colcord.

Pending the announcement, Polaroid shares were suspended near the end of trading Wednesday on the New York Stock Exchange.

Candymaker: M&Ms uses dulce de leche to lure Hispanic consumers

Candy giant M&M/Mars Inc. hopes to win over Hispanic consumers with a new style of M&Ms made with dulce de leche, a sweet Latin American variety of caramel.

The new M&M's will be sold next month in San Diego, Los Angeles, Miami, Puerto Rico, San Antonio and Brownsville, Tex. Dulce de leche is roughly translated as "candy milk."

The company said it would be the first major confectioner to sell the flavor in the United States. M&Ms are made at plants in New Jersey and Tennessee.

Earnings: Newell Rubbermaid cites sales decline for shortfall

Shares in Newell Rubbermaid Inc. tumbled nearly 7 percent Wednesday after the housewares and consumer products maker warned that its earnings for the second quarter and full year would fall short of estimates.

The Freeport, Ill.-based company cited declining sales triggered by the economic slowdown in the United States and Europe, as well as investment costs of an overhaul and streamlining begun this year under new chief executive Joseph Galli Jr.

The firm now expects to report per-share earnings of 29 cents a share for the second quarter and $1.20 to $1.30 for 2001. Analysts surveyed by Thomson Financial/First Call had estimated 37 cents for the quarter and $1.50 for the year.

Stocks: Traders can look for coal

How hot is the market for coal?

The industry is about to find out as coal futures begin trading today at the New York Mercantile Exchange.

Futures exchanges exist to transfer the risk of price volatility from people who don't want it in this case, power producers or steel manufacturers to speculators who are willing to take a gamble on making profits from this uncertainty.

Yet while more than half of the nation's electricity is derived from coal, analysts are skeptical that Nymex's Central Appalachian futures contracts will succeed.

Wall Street: Dow Jones announces another 150 job cuts

Dow Jones & Co., publisher of The Wall Street Journal, said Wednesday it would cut about 150 additional jobs because of a rapid decline in advertising revenues.

The company laid off 16 editorial staff from The Wall Street Journal on Monday. Company spokesman Steven Goldstein said executives planned to disclose details of the additional job cuts today when it releases its second quarter earnings.

Goldstein declined to say which parts of the company would be affected.

Including an earlier round of 225 job cuts in April, Dow Jones is paring about 5 percent of its work force, which stood at 8,574 at the beginning of the year. The Wall Street Journal also laid off 20 people last fall when it closed its regional editions.

IMF: Board to discuss Turkey loan installment

The International Monetary Fund's board will consider a $1.6 billion loan installment for Turkey today, now that the country's government took steps to meet conditions for obtaining the money.

Horst Koehler, the IMF's managing director, announced the session Tuesday.

The board meeting, which had been set for July 3, was postponed because the government had not fulfilled IMF requirements to reform the banking system and name nonpolitical appointees to the board of Turk Telekom, the state-owned monopoly that is slated for privatization.

The World Bank, the IMF's sister institution, followed suit, postponing a $1.7 billion loan to Turkey.

Troubles in the banking sector were seen as the main cause of a financial crisis in February that led to layoffs and a plunge of more than 50 percent in Turkey's currency.

Upscale toys: California investors to buy bankrupt retailer

Zany Brainy, the bankrupt upscale toy retailer, has agreed to be sold to a Los Angeles investment firm for $115 million.

The deal with Waterton Management, announced Tuesday, must be approved by a U.S. Bankruptcy Court. A hearing is set for Aug. 10.

No layoffs or closings are planned among the chain's 187 stores nationwide, and headquarters will remain in King of Prussia, Pa., said Thomas Vellios, Zany Brainy's chief executive officer.

Creditors would get about 20 cents on the dollar through the sale, Vellios estimated. Shareholders are expected to get nothing.

Leadership: Fortune editor named Time editorial exec

AOL Time Warner Inc. completed a reshuffling of its top editorial ranks, naming longtime Fortune magazine editor John Huey as the No. 2 editorial executive for Time Inc., AOL's giant magazine division.

The move Tuesday came a day after AOL pulled Walter Isaacson from the position to take over CNN, another part of the company's sprawling media empire. CNN is in the midst of a major revamp as competitors Fox News, CNBC and MSNBC eat away at its market share.

Huey, 53, who had been in charge of Fortune and four other business magazines, will take a hands-on role as editorial director while Norman Pearlstine, Time Inc.'s top editorial executive, spends more time on corporate affairs.

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