https://whtc.com/news/articles/2019/mar/18/xerox-says-exploring-potential-deal-for-financing-business/
Not too surprised
3 replies (most recent on top)
This business has been in and out several times. How will they use the proceeds is the question. Pay off more debt? Buy a company? Invest in R&D? Or one time shareholder dividend? Hmm....
Correction: Xerox USED to borrow at 4 percent. That was before Xerox's Junk Bond rating. Today, Xerox can't borrow at these rates, which further escalated the desire to sell of XFS.
Xerox borrows at 4 percent and charges the customer 5 percent. It's actually very profitable for Xerox. Add a couple of percent to that debt and that's how much revenue Xerox is willing to forgo.
Reminds me of when Sears sold the Sears credit card, the most profitable aspect of the business, then returned the windfall as one time dividend to shareholders. Then went bankrupt for selling the golden goose.