Coleco Denies Reported Sale of Plastic Lines

Financially troubled Coleco Industries Inc. on Tuesday denied a published report that it has sold its lines of plastic outdoor toys for an estimated $30 million.

Barbara Wruck, a Coleco vice president, said the report of a sale to Hasbro Inc., the country’s largest toy company, was premature. However, Coleco said in a statement that it has “already received offers for the sale.”

“We do intend to find a purchaser for that product line. The company has not announced anything official at this point,” Wruck said.

Coleco also said Tuesday that its short-term lenders have extended to June 30 an interim financing arrangement that expired on June 1.

The extension is intended to provide the company with funds as it tries to reduce and restructure its bank debt through the sale of assets and to arrange for new working capital.

Analysts Quoted

The Hartford Courant, quoting industry analysts and Coleco sources, said Coleco had reached an agreement to sell the lines that helped launch the company more than 30 years ago.

Wayne Charness, a spokesman for Pawtucket, R.I.-based Hasbro, declined to comment on the newspaper report.

Coleco lost $47.4 million in the first quarter of this year, and has been in default on the interest payments on $335 million of its debt securities.

Paul C. Meyer, Coleco executive vice president for finance, said he was notified Tuesday that investors owning about $120 million of those bonds had withdrawn a previous demand for immediate repayment.

Coleco has offered to exchange the $335 million in bonds for a combination of new bonds and common stock, but the original terms of that offer were rejected by investors. The company has extended the offer to June 30.

The product lines to be sold, the newspaper report said, include plastic wading and splashing pools, pool filters, children’s outdoor furniture and clubhouses, and pedal-powered and battery-operated cycles.