Medison heads for bankruptcy

Korean company Medison, best known as a maker of high-quality ultrasound equipment, will soon file for court receivership, according to Asian news services. The company is laboring under a huge debt, reported Asia Pulse, and can no longer service its loans. Medison holds 247.2 billion won (US$185.4 million) in interest-bearing debt and has short-term liabilities maturing in 2003 exceeding 175 billion won (US$131.25 million). Company executives contacted creditors Jan. 29 about their decision to file for bankruptcy after missing a 4.4 billion won (US$3.3 million) loan payment, according to the Korea Times.

Founded in 1985, Medison quickly became an international icon for Korean prosperity, capturing a majority of the Korean marketplace for ultrasound and forging deals with international vendors to supply low-cost ultrasound equipment. The company also was a major promoter of real-time 3D ultrasound systems. Its demise appears to be due primarily to ill-considered ventures in Web-based businesses. The plunge in stock prices of companies in which Medison had invested borrowed funds began to destabilize the company more than a year ago, according to Asia Pulse. Medison posted 116 billion won in net losses in 2000 compared with 52.3 billion won in net profits the previous year. In a bid to remain solvent, Medison has been selling assets. Among these was its share in Kretztechnik, which GE purchased in October (SCAN 10/17/01). A statement released by Medison and its creditors, reported by Asia Pulse, said company executives are seeking corporate alliances and foreign investments.