Unisys Corp and its bankers are refusing to panic over the fact that the company’s $98.2m net loss for the second quarter puts it perilously close to breaching the net worth requirements of its bank loan covenants. The covenants require it to show a minimum net worth of $3,500m and the loss takes the figure down to $3,600m – but while the breach will occur this quarter if the company turns in similar losses and has to take charges for restructuring, the banks see the possibility of further restructuring as positive. The company plans to cut employment to below 70,000 by the end of the year from 72,000 now, and that could fall further if the company succeeds in its efforts to sell assets. It also plans to reduce further the number of plants, already cut to 19 from 36 since 1986. The company’s target is to reduce debt to $3,100m by the end of the year from $3,870m at the end of March.
