Sat, Jul 10, 2004 - Page 11 News List

Another bond default feared


Debt-ridden Cradle Technology Corp (衛道科技), a workstation and server-equipment maker, said yesterday that it is making a last-ditch attempt to raise NT$1 billion it needs to repay corporate bonds approaching maturity.

Cradle is facing default on NT$386 million-worth of bonds which fall due on July 24 and another NT$600 million-worth in overseas convertible bonds which mature on August 22, the company said in a statement submitted to the Taiwan Stock Exchange Corp (TWSE).

"We're trying to solve the cash crunch by seeking syndicated loans and bankrolls from specific investors. But, we haven't got enough money yet," company spokesman Philip Ko (柯清雲) said in the statement.

Cradle has been in the limelight after Procomp Informatics Ltd (博達科技) surprised investors by defaulting on corporate bonds worth NT$2.98 billion in mid-June in circumstances which have given rise to allegations of fraud. The company filed a restructuring plan to the court ahead of the default.

"As time is running out, the company will not rule out the possibility of selling its non-core businesses at reasonable prices," Ko said.

The company had on;y NT$39 million in cash as of Thursday, the statement said.

Cradle is likely to meet with its creditors to solve its financial difficulties, if the company fails to raise the fund, Ko said.

Cradle shares have plunged 45 percent to NT$3.24 each yesterday on the TWSE, since the middle of June as gun-shy investors are dumping small-cap stocks in fears of another bombshell similar to Procomp.

Procomp was suspended from trading its shares after the company's chairwoman failed to adequately explain why some NT$6 billion in liquid assets was frozen.

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