Zenith Files for Bankruptcy

04:46 AM ET 08/24/99

GLENVIEW, Ill. (AP) - Zenith Electronics Corp. filed for bankruptcy as part of a long-planned overhaul of the struggling maker of televisions, VCRs and digital equipment.   The Glenview-based company said the Chapter 11 filing on Monday in U.S. Bankruptcy Court in Wilmington, Del., was one of the final steps in its restructuring, which is aimed at reducing debt and de-emphasizing manufacturing.

Zenith announced last year that it would file for bankruptcy after coming up with a turnaround package that would essentially remake the company.

``Our operational restructuring - transforming Zenith into a sales, marketing and technology company - is proceeding on schedule,'' said Jeffrey Gannon, president and chief executive officer.

The company's chief stockholder, LG Electronics of South Korea, has agreed as part of the restructuring to exchange $200 million of its debt claims for 100 percent ownership of the reorganized Zenith.

Zenith earlier this year obtained a $300 million line of credit from Citicorp North America Inc. to cover its debts during the restructuring period.

LG Electronics, which owns 55 percent of Zenith's outstanding shares, acquired its majority interest in November 1995.

John Koo, LGE's vice chairman and chief executive officer, said the company remains committed to the restructuring ``because we believe that a restructured, refocused Zenith can be an effective competitor in the North American television industry.''

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