Unisys Corp continued its systematic elimination of its debt, accepting $271.2m of its 8.25%, 2006 convertible notes tendered for conversion into common stock under its previously announced offer (CI No 3,286), which expired Monday. The conversion follows an earlier conversion of $345m of 8.25%, 2000 notes into common stock in October (CI No 3,278). With the two conversions, Unisys says it has reduced its long-term debt by $616m and cut annual cash payment requirements for interest expense by more than $50m. The company is more than half the way toward achieving its goal of reducing debt by at least $1bn by 2000. Under the offer, holders whose notes were accepted for conversion will receive approximately 145 shares of Unisys common stock and a cash premium of $155 plus accrued interest for each note. Based on the $271.2m in notes accepted for conversion, the company said it will take a one-time charge against net income in the fourth quarter of about $42.5m to cover the cost of the special offer and will issue an additional 39.4 million shares of common stock, bringing the total number of common shares outstanding to approximately 249 million. Unisys asserts that the issuance of the additional shares will not impact diluted earnings per share in fiscal 1998 since the additional shares would have already been included in this calculation.
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