Morrison Knudsen Dodges A Bullet

IS MORRISON KNUDSEN THE big engine that could? For now, the giant engineering company will stay on track. Morrison, which lost $350 million on sales of $2.5 billion in 1994, persuaded key banks on June 30 to roll over $313 million of debt due by July 31 and to provide up to $30 million in new loans. Key to the deal is finalizing Morrison's transfer of its deeply troubled transit- car unit to its bonding company, Fidelity & Deposit. It also is likely to raise new cash by issuing shares--diluting existing shareholders but providing enough breathing room to soldier on. But it still needs better results and smart proceeds from sell-offs to avoid another brush with bankruptcy next year.

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