TriGem Computer Inc., Korea`s No. 3 personal computer maker, filed for bankruptcy yesterday, weeks after announcing a net loss in the first quarter. The move will result in the delisting of the company from the local stock market 16 years after its entry, according to the Korea Exchange.
The Suwon District Court will have a month to decide on the company`s entry of court receivership and three months to approve the company`s reorganizing plan.
"While we have implemented radical restructuring efforts to put our operations on track, we have no choice but to file for court receivership since we face a liquidity crisis from a rapid decline in overseas revenues," TriGem said in a the statement.
"Our declining sales in foreign markets were the biggest factor that forced us into bankruptcy. We have been cutting jobs and shifting our product lineup to restructure our finances in the past months but it has not been enough," said a TriGem Computer spokesman, saying that the company will completely fold its international business.
The company plans to continue to distribute products to the local market and provide after-sales services to customers through outsourcing.
TriGem Computer announced a loss of 2.9 billion won ($2.9 million) for the first quarter. First-quarter revenue was 367.5 billion won. The company currently has more than 774.5 billion won in debt.
TriGem Computer said a large part of the loss in the first quarter came from declining sales in foreign markets. The company has been attempting to transform from an original design manufacturer and build its own sales channel in foreign markets, a strategy which apparently backfired after failing to secure sufficient orders.
TriGem Computer has two manufacturing lines in Gyeonggi Province and operates overseas factories in China, Mexico and Netherlands, which combine for a production capacity of 7 million units per year.
The company sold about 4 million personal computers last year in the Korean market, reporting 2 trillion won in revenue, emerging to the No.3 personal computer maker in behind Samsung Electronics Co. and LG Electronics Co.
The weak personal computer market has been wreaking havoc on mid-sized computer markers, which were struggling to adapt to increased competition in foreign markets, with manufacturers from Taiwan and other countries providing cheaper products, while also being forced to cut product prices in the domestic market to compete with larger rivals.
TriGem Computer`s announcement comes weeks after another mid-sized computer maker, Hyunjoo Computer Co., was delisted from Kosdaq after filing for bankruptcy. Hyunjoo Computer reported 300 billion won in revenue and a loss of 18.2 billion won last year.
By Kim Tong-hyung