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The current version of Boston Scientific (BSX) is a merged compeny. The former Guidant sales are the heart rhythm managment operations of the new company. Heart stent sales come from the old BSX. The firm also has an endosurgery business that it was readying for an IPO.

But, the IPO has been pulled, perhaps due to market conditions. BSX has put its fluid management business on the market, and a deal for that could happen this year.

But, as its cash flow falls, primarily due a sales drop-off caused medical risks uncovered in its stents, BSX is suffering from anemic cash flow. The situation is bad enough so that its bonds have been dropped to junk status. BSX took on $5 billion in bank debt to buy Guidant and now has a total of $9 billion in debt.

Standard & Poor’s and Fitch Ratings are concerned about the odds of the company being able to make its nut.

BSX may be running out of options very quickly. The endosurgery business has about $1.4 billion in revenue. The planned IPO of 25% of that business would have brought in over $1 billion.

Watch for BSX to sell the entire endosurgery operation. If it can fetch $4 billion, it is well worth losing the unit and its revenue to pay down debt. A sale of the fuild management operations would add another chunk of cash..

The disposal of the two businesses would go a long way to solving the BSX short-term debt problem. It would make the parent company smaller, and would take away two of it fast-growing businesses. What would be left is a company that is still in trouble, but one that bought itself some time.

BSX shareholders have seen the value of the company drop over 55% in the last two years, and that is unlikely to change under almost any circumstances.

Douglas A. McIntyre