President and CEO Philippe Bodson of Lernout & Hauspie Speech Products NV (L&H) on Friday put the entire Belgian speech technology developer up for sale.
Bodson said at an extraordinary L&H shareholders meeting in Ieper, Belgium, that the individual sale of certain parts of the company will most likely not raise enough money for the company to continue work on speech technology, its core area. L&H has only enough money to continue operating for another couple of months, he said.
L&H has been trying to sell translation unit Mendez, with a target sales price off US$160 million. However, to date Credit Suisse First Boston Corp. has been unable to find a buyer, said Bodson, adding it is likely the unit will be sold below the asking price and a sale will probably not be concluded soon.
Sale of Mendez below the target price will prevent L&H from executing its restructuring program. The company was planning to use the proceeds of the sale to pay off certain creditors and finance part of the company’s operations. L&H has a debt burden of 603 million euros (US$544 million), the company said.
Because of changes in the market situation, Bodson said the only viable solution now is the sale of all L&H units, the swift merger of units with other market players, or joint ventures with partners. Otherwise, Bodson said, all personnel will walk off to other companies resulting in an empty shell at L&H. However, he did note that the plan to sell the entire company could be reversed if market conditions change or if the sale of individual units turns out to work well after all.
A representative of L&H shareholders speaking at the meeting urged Bodson to work to win financial support for the struggling company.
“You (Bodson) have made clear to us that the restructuring plan is more and more a liquidation plan,” said a partner at consultancy firm D