Unisys Corp. has suspended its preferred stock dividend and was trying to sell more than $1 billion in assets, part of a plan by the troubled computer company to further reduce its debt.
Unisys announced last fall it would sell real estate and "non-strategic" divisions. Monday was the first time the company put a figure on the amount of assets it planned to sell.Unisys plans to pay off debt with the $30 million normally paid each quarter to holders of preferred stock, spokesman Peter Hynes said from the company's headquarters in this Philadelphia suburb.
Unisys' move prompted Moody's Investors Service Inc., a major credit-rating agency, to drop is rating of the preferred stock by one notch. Moody's also said it was re-evaluating Unisys' long-term debt ratings for possible downgrades.
Common stock dividends were suspended in September, giving the nation's third-largest computer maker $40 million more each quarter to put toward debt reduction. Debt reduction is crucial to reduce the company's interest expenses.
Unisys has three classes of preferred stock. Series A is publicly traded on the New York Stock Exchange, and the $150 million worth of stock in series B and C are entirely owned by Mitsui & Co. of Japan.
Mitsui, a Japanese trading company, owns one-third of Unisys' Japanese subsidiary. Unisys sold the preferred stock to Mitsui last year to raise cash.
Rick Martin, an analyst at Prudential-Bache Securities Inc., said Mitsui mostly likely was advised of the dividend suspension beforehand and consented.
The preferred stock is cumulative, meaning Unisys must make up for any missed dividends once it resumes paying them.