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Sichuan Changhong Electric Co., a leading domestic television maker, said Friday that it had no plans to acquire a U.S. distributor that owed it hundreds of millions of dollars.
Changhong issued the statement on the Shanghai Stock Exchange Web site after local media reported it had plans for a takeover and what the company called other incorrect information.
The statement said Changhong had "no plans yet" to take over Apex.
Last month, Changhong said it expected a substantial loss for 2004 because Apex Digital Inc., a U.S. distributor known for its low-cost business model, failed to pay for hundreds of millions of dollars' worth of sets. It said that Apex owed Changhong US$467.5 million as of Dec. 25 and as Changhong may only be able to collect US$150 million of the amount, it would have to write off about US$310 million.
Changhong also said in its statement Friday that it filed for a writ in a Los Angeles court Dec. 14 requesting that it be allowed to review Apex's finances and operations. It added that Apex had already pro-vided some financial documents, which Changhong's lawyers and accountants were reviewing.
The dispute with Changhong is a serious challenge for Apex, a company started five years ago that grew to about US$1 billion in sales of DVD players and televisions in 2003 before stumbling last year.
It became one of the first to gain shelf space and sales with ultra low-priced electronics products, starting with DVD players, and a business structure that involved no product development and relied upon low-cost manufacturers in China to produce its goods.
Shanghai-listed electronics maker, Jiangsu Hongtu High Technology Co. said troubled U.S. distributor Apex Digital Inc. owed it 83.29 million yuan (US$10.1 million) in outstanding payments for shipments at the end of last year.
Nanjing-based Hongtu joins Changhong and Tianjin-based DVD player maker, Genius Co. Ltd., which said it too was owed US$4.3 million by Apex.
Hongtu said its sales to Apex were guaranteed since 2002 through U.S. commercial and finance firm, CIT Group, but that it could take up to 18 months to receive the money.
(Shenzhen Daily January 10, 2005)
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