Thread,
After reading this in the South China Morning Post, I'm not so sure about my prior posts. (Note - all stated funds in $HK=7.75/$US)
South China Morning Post
Internet Edition
Monday February 8 1999
Albatronics on brink as debts soar
PETER CHAN
Consumer electronics maker Albatronics (Far East) faces liquidation after amassing debts of $794 million.
The firm said it did not have sufficient funds to continue operating beyond the end of this month and would be wound up if it failed to reach agreement with bankers on restructuring.
The group, which reported a $529.31 million loss for the nine months to December, said that of the $794 million debt, $348 million payable to eight banks and key trade creditors had become overdue.
In addition, $223 million would become due to its banks and trade creditors on March 6. The group's directors expect difficulty making these payments.
The group met banks and trade creditors last Saturday to discuss debt restructuring but no legally binding agreement had been reached.
However, Nam Tai Electronics - which controls more than 50 per cent of the group's issued capital - is unwilling to support the group through a shareholder loan or subscription for new shares unless there is a successful restructuring of debts.
Nam Tai is reviewing the restructuring proposal and may ultimately inject $110 million of new funds into the group, of which $31.5 million would be used to repay part of the bank borrowings.
Nam Tai took control of the group in September after subscribing for 200 million new shares at 35 cents each, valuing the group at just $140 million.
Nam Tai had not formulated a business plan or management strategy as its review of the group's operations had yet to be completed.
The $529.31 million attributable loss for the nine months to December 31 compared with $22.4 million attributable profit in the 12 months to March 31 last year.
The huge loss was a result of $446.53 million in provisions made against the discontinuation of the group's video compact disc operation, write-off of inventories and development costs and provisions for amounts due from the group's associated companies.
At the operating level, the group had incurred an operating loss of $54.5 million during the nine-month period, compared with $61.3 million operating profit during the year to March 31.
Turnover for the nine months was $1.62 billion, down from $2.73 billion in the previous full year.
As of December 31 last year, the group had $327.76 million current assets and $866.84 million in current liabilities - equivalent to net current liabilities of $539.08 million.
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