Macmillan asset slip is denied

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THE ADMINISTRATORS of Maxwell Communication Corporation denied yesterday that the sale values they have placed on the company's main subsidiaries, the Macmillan and Official Airlines Guide groups, are over-optimistic.

In a hearing before a US bankruptcy court in New York, lawyers for the administrators said they had not changed their estimate of roughly dollars 1bn for the groups' auction value, despite indications that earnings have fallen sharply. Late last year, the administrators, Price Waterhouse, rejected an unsolicited bid for both groups of dollars 725m in cash, plus assumption of about dollars 500m in liabilities, from a group led by the Texas financier Robert Bass.

The administrators were in court seeking approval of their statement of MCC's unsecured debts, which they put at dollars 3.1bn to dollars 3.6bn. But their presentation was interrupted by Bankruptcy Court Judge Tina Brozman, who asked whether recent speculation about Macmillan's profits meant the auction would raise less money to reimburse MCC's creditors than originally anticipated.

In contrast to earlier suggestions of a bidding war for MCC assets, US newspapers this month said documents circulated by the administrators' advisers, JP Morgan, showed earnings for the two companies slipping to dollars 80m this year from dollars 145m in 1991. The weakening performance was particularly troubling at Macmillan, the publisher acquired by the late Robert Maxwell for more than dollars 1bn, suggesting it would sell for less than dollars 400m.

But the administrators' lawyer, John Gellene, said that their valuation of the companies' assets remained unchanged.

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