Korean ultrasound technology firm Medison has proposed a three-point strategy for emerging from the court receivership status it received on March 8, company spokesperson Christina Kim told AuntMinnie.com.
First, Medison plans to embrace its core ultrasound business, and has abandoned other medical equipment businesses that proved unprofitable for the Seoul-based firm.
Until recently, Medison has been heavily invested in a wide range of medical and diagnostic equipment firms, both jointly and on its own, according to product manager Kevin Seung. The products included Osteosis bone densitometry equipment, Medison x-ray equipment, Medinus MRI scanners, Bionet patient-monitoring equipment, and Mediface PACS. All of these business have been sold or spun-off, Seung said.
The second point of the recovery plan relates to strategic alliances, according to Kim. This means that any business activities not specifically related to ultrasound technology, research, or development are subject to outsourcing.
Third, she said, the company plans to pay off all of its debts. According to a March 18 article in the Korea Times (which Medison has confirmed to be correct), the firm now carries more than $185 million in interest-bearing debt, with short-term liabilities in excess of $131 million. The target date for repayment is 2011, to be achieved through aggressive restructuring and sales of assets, the article states.
Medison's finances deteriorated last year due to a cash crunch following the sale of its share of Austrian firm Kretztechnik AG to GE Medical Systems of Waukesha, WI, according to the article. Medison is still waiting to receive all of the funds from the sale, according to company executives.
"We sold out to GE six or seven months (ago), but we haven't received all the money," Medison's Seung told AuntMinnie.com, adding that the causes of the situation were complex.
The company filed for court protection in January after it failed to make two loan payments totaling approximately $4.3 million, according to company statements made earlier this year. The court receivership order was granted March 8, and the firm is now operating under the receivership of former CEO Seung-woo Lee and court-appointed receiver Kyun-jae Choi.
Lee told the Korea Times that court receivership is very different from bankruptcy in the U.S., and is required in the Republic of Korea anytime a firm defaults on its maturing debt for two consecutive days.
Medison's strengths include a strong foothold in the ultrasound industry, competitive technology, and a competitive edge in sales in marketing around the world, Lee told the newspaper.
By Eric BarnesAuntMinnie.com staff writer
March 27, 2002
Related Reading
Medison defaults on loan repayment, February 5, 2002
GE completes Kretztechnik acquisition, October 11, 2001
Medison honored at World Perinatal Conference, September 28, 2001
GE to enhance ultrasound line with Kretztechnik purchase, August 16, 2001
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