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The cash situation also grew critical at XM, which was forced to lay off 80 of its 480 employees and raise $210 million, most of it debt convertible into shares at $3, 75% below the price at its initial public offering.
Mecom has significantly reduced it debt burden since the start of 2009 by selling off its German newspapers, some of its Norwegian titles, and this week offloaded part of its Dutch newspaper business to raise cash and reduce costs further.
But for tax purposes, banks often get to call it debt.
The lenders to Mitsui Construction, led by Sakura Bank, are likely to grant it debt forgiveness.
Sources believe that up to half of HMV's stores could eventually close within a year, as part of any rescue deal that would see it debt burden slashed.
"We bought in at $41 million, $40 million of it debt, and three years later it was worth $175 million, with no debt," Mr. Cornstein said.
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Unlike most members, it meets its debt and deficit rules.
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It nearly doubled its debt sale this week.
It also eliminated its debt.
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