Unisys Corp has suffered a substantial setback in its efforts to pay down its debt with the decision to withdraw the flotation of its Paramax Inc defence business in the wake of the slide on Wall Street and uncertainties over the outlook for US defence spending. The company did offer a bit of cheer with a forecast that it expects to be in profit for the current quarter, to go a little way to reduce the $1,470m accumulated losses for the first nine months. Unisys said that the proposed sale had been an opportunity, not a necessity, and that it would not have been in the best interests of Unisys and its stakeholders to sell the unit in a weak market at a fire sale price. Sale of Paramax, which would have paid Unisys $332m cash to settle inter-company indebtedness, was intended to raise between $440m and $500m for Unisys, giving it some $800m to set against its debt mountain, which currently stands at about $3,000m, but in the present climate would likely not have been saleable at the intended price.
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