Cash-strapped Kosonic tries to raise funds
Cash-strapped audio-product maker Kosonic International Holdings says the $30 million in monthly turnover from its Shenzhen video-compact disc (VCD) factory - its main operation - is providing it with cash flow while it awaits the outcome of a rescue proposal.
After the company's annual meeting yesterday, financial controller Chung Kam-kong, who was appointed in January, said Kosonic would also lower its $202.38 million stock level to generate more cash.
'We have some cash in hand and can generate cash flow from selling our old stock,' he said.
About two-thirds of Kosonic's VCD production lines in Shenzhen were idle, but he said the 10 lines running were profitable.
Kosonic's shares have been suspended from trading since October 22 last year, when the company said it was talking to creditors about a debt restructuring.
For the past financial year to September, Kosonic had $580.76 million in current liabilities, of which $315.8 million was in loans to be repaid within a year.
Interest expenses were $35 million last year.
Mr Chung said he was not sure if profits from the Shenzhen plant would cover these payments.
He said the company's biggest creditors - banks - had agreed to automatically extend a standstill agreement every 45 days to grant more time for the rescue plan.