Gizmondo Europe files for administration
UK-based Gizmondo Europe (GE) has decided to enter into administration, the UK's closest equivalent of Chapter 11 bankruptcy protection
Gizmodos Swedish operation is expected to go the same way, US Securities and Exchange Commission filings reveal.
The company, owned by US firm Tiger Telematics, will have its request judged by the court on 31 January. In the meantime, it is automatically protected from its creditors. The move does not affect Tiger itself or another subsidiary, Gizmondo USA, its parent says.
Tiger said it has recently won a $5m bridging loan which it plans to re-invest in the UK and to restructure GE's debt. To this end, GE has cut its "monthly staff costs" by 50 per cent. That would suggest that half of the subsidiary's workers are now out work, but the company did not specify if the reduction amounts to redundancies, pay-cuts or both.
Last year, Tiger reported net sales of $1.3m for the three months to 30 September 2005 and $2.85m for the first nine months of 2005, during which time it made a net loss of $264.6m, according to the company's filings with the SEC. The company posted a Q3 net loss of $44.5m.
Last week, it emerged that Tiger is trying to secure $75m in funding, which it must put in place by 31 March under the terms of a deal struck with two of GE's creditors. ®