Corning to Devote Sale Proceeds To Bolstering Pension

November 12, 2002 ( - Corning Inc. expects to use the proceeds from its $850 million sale of its television lens business to manufacturing conglomerate 3M to make a payment to Corning's pension plan estimated to be under underfunded by about $150 million.

Corning, based in Corning, New York, said it would then boost its annual pension contribution from its current $25 million to $60 million, according to a Reuters news report. Proceeds from the sale of Corning Precision Lens would also go to paying down Corning’s debt, the company said.

For Corning, the world’s largest producer of fiber-optic cable, the sale generates much-needed cash, Reuters said. The company struggles to cut costs, reduce debt and return to profitability as it endures the protracted slump across the telecommunications sector. Telecommunications accounts for about half of its sales.

Corning expects to record an after-tax gain of about $400 million from the deal, according to Reuters.

Corning Precision Lens is the largest worldwide manufacturer of lens systems for rear-projection televisions. 3M said the acquisition would bolster its position in the display industry.

Corning joins  a long line of major US corporations with ailing pension plans who are struggling to put their plans back on firmer financial footing.