NEW YORK (CNN/Money) -
Xerox Corp. said Friday it renegotiated a $7 billion line of credit, giving the copier maker more access to funds in an effort to restore its financial health.
Xerox paid its bank $2.8 billion on a revolving line of credit and extended the maturity date for $4.2 billion in debt. The new arrangement consists of three loans totaling $2.7 billion and a $1.5 billion revolving line of credit.
Xerox said improving finances allowed it to renegotiate with its bankers. New access to funds will enable the company to focus "intently on building back value," Chairman and CEO Anne M. Mulcahy said.
The first term loan of $700 million must be completely repaid by its final maturity this September. The remaining term loans and the revolving line of credit are due April 30, 2005, Xerox said.
After the repayment of the $2.8 billion portion and $1.3 billion in debt that matured this quarter, Xerox has about $1.7 billion in cash, the company said.
Xerox (XRX: up $0.55 to $8.40, Research, Estimates) stock rose as much as 6 percent Friday.
The renegotiation comes a month after Moody's Investors Service cut Xerox's debt rating to an even lower "junk bond" status on concerns about sales growth. Xerox has about $17 billion in debt outstanding.
Xerox shares fell as low as $6 late last year as the company struggled to catch up with competitors who pulled ahead with digital printing technology.