Troubled Unisys may lose credit line

The immensely challenged tech giant Unisys Corp. could lose its $275 million revolving credit line in late May when it expires.

The company is negotiating with banks to renew the credit line, but the tight financial environment has complicated those talks for the Blue Bell company.

Banks led by Bank of America Corp., one of the nation's largest and a recipient of government bailout funds, provided the current $275 million line. "The banks are not interested in doing this sort of thing," Unisys spokesman Jim Kerr said yesterday.

Unisys has other sources of liquidity, including more than $500 million in cash at the end of 2008 and a separate $150 million credit line backed with accounts receivables.

But the company has $300 million in debt due next March, and it has lost more than $2.2 billion in the last four years.

"We are operating in a tough environment," Kerr said, "and we are focused on driving profit and cash."

Unisys' stock price, which fell to 35 cents March 13, has rebounded. It rose nearly 42 cents yesterday, or 35 percent, to close at $1.62. The stock may have been helped this week by an article by Jon Markman on MSN Money that said Unisys stock was undervalued. The company announced a new contract from the Department of Defense valued at $92 million.

Others believe Unisys has deep problems because of fierce competition in its computer-services business and shrinking outlays for technology spending in the recession.

Unisys hired turnaround specialist Ed Coleman in late 2008 as chief executive officer and in December said it would cut about 1,300 jobs, or 4.5 percent of its workforce. In the last three years, the company has sold $385 million in assets to raise cash.

"This," Matt Egan, a bond portfolio manager at Loomis Sayles & Co., in Boston, told Bloomberg News, "is a busted company."