Xerox To Take First Quarter Pre-Tax Write-Off.
STAMFORD, Conn. (AP) _ Xerox Corp. said it would take a pre-tax charge of approximately $400 million in the first quarter to write down the value of its investment in VMS Realty Partners, a Chicago-based real estate company.
VMS Realty acquires, manages and develops hotels, office buildings, shopping and residential centers.
The company announced in February that it had ceased all but essential payments to its creditors because of severe financial problems.
A Xerox subsidiary paid $106 million for a 25 percent equity stake in the company in 1987. In addition, the subsidiary holds VMS subordinated notes and accrued interest totalling $136 million, and has extended a $125 million in credit to the company through an unsecured line of credit, Xerox said.
Through its third-party financing operations, Xerox also has $200 million in collateral loans and other secured financing arrangements with VMS.
Xerox said it was writing down the investments after evaluating the holdings VMS has left to resolve its financial difficulties.
Xerox said it would release its first quarter results toward the end of April.