Zenith moved a major step closer to finalizing its plan for emergence from Chapter 11 as a wholly owned subsidiary of LG Electronics with the announcement that holders of a majority of its outstanding bonds have agreement to its debt restructuring proposal.
The proposal is part of Zenith's prepackaged reorganization plan that provides for a debt swap with bond holders, debt forgiveness and additional financing from LGE in exchange for Zenith TV manufacturing assets and a 100% stock interest, and payouts to unsecured creditors.
Along with that announcement, Zenith reported that its loss for 1998 narrowed to $275.5 million from the year-earlier $299.4 million and included $202.3 million in restructuring charges. Sales for the year were down 16% to $985 million.
In the fourth quarter, Zenith's loss declined to $87.7 million, after a $94.5 million restructuring charge, from the $155.7 million deficit in the same 1997 period. Sales, at $310 million, were down 11%.
Since filing for Chapter 11 last year, Zenith has closed its Melrose Park, Ill., picture tube factory, console and projection TV facilities in Juarez, Mexico and sold its Mexican electron gun factory. The Zenith that emerges from bankruptcy will be a marketing and research company with no owned manufacturing capability.