Xerox denies cash flow crisis

Xerox has dismissed rumours that it's suffering from acute cash flow problems and plans to file for creditor protection under the Chapter 11 regulations.

The story surfaced in trading circles after Xerox announced that it expects a third quarter loss of 15 to 20 cents a share when results are posted later this month. Shareholders were told their quarterly dividend will drop from 20 cents a share to five, in an effort to cut company spending by $400m a year. But a European spokeswoman for Xerox told Reuters that the company was not having cash problems, stating the company had a $7bn revolving credit line valid until October 2002. Xerox has seen its profit drop in recent years, and despite a dramatic restructuring programme, its stock market valuation plunged 85 per cent in 1999.