Polaroid Corp. said it intends to report its third-quarter results next week. The stock market seems convinced the company will enter bankruptcy protection before then.
Shares of the debt-burdened instant film and camera company fell 35 percent, or 15 cents, to 28 cents Tuesday on heavy volume. Earlier, shares fell as low as 27 cents, well below the previous 52-week low of 42 cents.
Meanwhile, the company’s bonds are selling at 10 cents on the dollar amid fears that even under Chapter 11 protection Polaroid will not be able to cover its bonds, said KDP Investment Advisors analyst Kevin Kuzio. Polaroid’s bonds, which totaled $575 million in August, were selling around 30 cents on the dollar in that month.
Polaroid has been operating under a debt load of about $940 million and has received waivers on its bank loan covenants. The company has $150 million in bonds maturing Jan. 15, and has been negotiating with bondholders to restructure its debt. In August, Polaroid pledged about $100 million in property as security to bondholders and the banks.
The company said that it would not have the funds to repay outstanding borrowing or refinance its credit agreements if lenders demanded repayment. In an August filing, Polaroid listed working capital–current assets less current liabilities–of $38 million as of July 1, down from $325 million on Dec. 31.
Polaroid has conceded that its core business is in decline.