It has received commitments from financial institutions and groups such as Citigroup, Deutsche Bank, JP Morgan, Merrill Lynch and UBS for a new 595m credit facility. This will consist of a 415m revolving facility and a 180m term loan, both of which will mature in September 2008.
The new credit facility is dependent on Xerox raising 900m from the recapitalisation programme, including around 300m of equity.
Xerox will use proceeds from the recapitalisation, term loan and some of its current cash balance to repay the 1.8bn outstanding from its bank facility.
As part of its recapitalisation Xerox will issue around 40m shares of common stock valued at 258m, 386m of convertible securities and 594m of a combination of seven- and 10-year senior unsecured notes.
In recognition of the fees associated with the 2002 credit facility, Xerox will record a 41m pre-tax charge in Q2.
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