Gizmondo Europe bankrupt
Tiger Telematics' UK subsidiary goes into receivership, cuts staff by half, further clouding the handheld-maker's future.
Last Tuesday, independent handheld-maker Tiger Telematics made a last-ditch effort to shore up the finances of its struggling British subsidiary, Gizmondo Europe Ltd., with a short-term loan of $5 million. Today, it appeared the company had secured the loan--but not in time to save its UK arm from bankruptcy.
This morning, Tiger filed an 8-K form under the heading "Bankruptcy or Receivership" with the Securities and Exchange Commission (SEC). The 8-K stated that "at the close of business on Friday January 20, 2006, the Company's wholly owned subsidiary, Gizmondo (Europe) Limited ('Gizmondo Europe') filed a High Court application for administration in the United Kingdom." The filing will protect the company from its creditors as it attempts a "financial restructuring of the business."
In today's filing, Tiger also announced that Gizmondo Europe has "made a reduction in payroll of approximately 50 percent of monthly staff costs during the week prior to the court application to reduce overall operating expenses of the business and significantly improve its prospects for a successful turnaround."
Gizmondo Europe's bankruptcy is just the latest blow to Tiger, whose Gizmondo handheld is among several that have tried to crack the Nintendo-dominated portable game market. To date, only one hanheld platform--the Sony PSP--has had any real success. Fellow independent hardware company Tapwave discontinued its Palm-based Zodiac. And despite a multibillion-dollar marketing and development push, Nokia's N-Gage cell-phone/game-deck hybrid has been all but ignored.
Tiger also used today's SEC filing to announced that it "will report shortly" on the status of its overall restructuring, which involves some $50 million in refinancing. As of press time, its stock was down $0.12 (7.41 percent), trading at $1.50.
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