Western Union Corp., responding to recent rumors that the company might declare bankruptcy, said it knows of "no pending adverse developments which have not been previously announced."
The company also said it expects to complete negotiations by the end of this month with key lenders. These lenders will provide the financing needed to keep Western Union afloat through the first quarter, it said.
Earlier this month, a group of banks agreed to defer collecting interest payments from the company, giving Western Union the financing it needed to survive early in the first quarter of 1985.
Western Union's financing flexibility has been severely limited by a decision to suspend dividend payments, and a group of banks recently canceled a new $100 million line of credit with the company.
The price of Western Union stock, which has plunged in the last year due to the company's financial difficulties, has fallen further recently as rumors about the company's uncertain future increased. After trading as high as 38 1/8 in the last year, the stock is now below 10.
"Western Union has been going through a difficult period in recent months," said Robert S. Leventhal, the company's recently appointed chairman and chief executive office. "However, as we announced on Jan. 2 when we successfully completed the first phase of a restructuring of our bank debt, we are continuing negotiations with our lending banks to provide the additional financing required for the remainder of the first quarter.
"These negotiations appear to be proceeding in a positive manner," Leventhal said, adding that the company could "return to positive cash flow in the second half of 1985."
After a continuing decline in the rate of growth of its telegram and Telex businesses, Western Union embarked on an ambitious diversification program several years ago. But company officials have conceded they lacked the financial resources and management talent to support that effort.
Because of mounting losses and a shortage of cash, which the company needs to promote its new Easylink electronic mail subsidiary, Western Union has eliminated dividends on its stock; annnounced plans to sell two subsidiaries; reduced employment by up to 10 percent and cut wages about 10 percent.