Maxwell Empire Could Fall Apart Because of High Debts, London Worries about Impact of Maxwell's Death on His Companies

Article excerpt

THE chances of the late Robert Maxwell's publishing empire remaining intact following his death Tuesday are virtually nil.

That appears to be the consensus among City of London financial analysts assessing the prospects of the two main chunks of Mr. Maxwell's far-flung holdings - Maxwell Communications Corporation (MCC) and Mirror Group Newspapers (MGN).

One banking expert put the tycoon's net indebtedness at British pounds2.2 billion ($3.9 billion). When trading in MCC shares resumed Thursday, they fell 63 cents to $1.53. MGN shares rose 73 cents to $2.15 amid speculation that the company, which publishes the London Daily Mirror, may become a takeover target.

Details of Maxwell's finances may take months to unravel, according to Valerie Conner, a banking expert with the London finance house Henderson Crosthwaite. "Much of the information was regarded as a family secret, and there is a mystery about the full extent of Maxwell's personal indebtedness and the true condition of his publicly listed companies," she says. Maxwell's two sons, Ian and Kevin, have taken control of the sprawling publishing interests.

Ms. Conner estimates Maxwell's private debts at around British pounds800 million. Earlier this year, amid reports that Maxwell's entire holdings were in debt to the tune of British pounds3 billion, he began selling off assets. Among the sales were Pergamon Press, his first major publishing enterprise launched in the 1960s, and TV interests in Britain and France.

These sales lowered his indebtedness to the British pounds2.2 billion thought to be outstanding when, it is presumed, he died and fell off his ocean-going yacht Lady Ghislaine as it was cruising at night near Spain's Canary Islands.

Kevin Maxwell, the new chairman of MCC, confirmed that more than 50 banks around the world had exposures to his father's companies, and there was no disguising City of London anxiety about the impact of Maxwell's death on the company's fortunes.

Bronwen Maddox, a financial analyst with the London Financial Times, said there was concern about the fact that much of Maxwell's private indebtedness was secured by loans on his public companies. …