Wang files for bankruptcy after results are released

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The Independent Online
WANG LABORATORIES, one of the early stars of the American computer revolution, filed for court protection from its creditors yesterday after an 11th-hour attempt to sell the company failed.

The decision was prompted by the long-delayed release of the company's results for the year to 30 June, showing a fourth-quarter restructuring cost of dollars 81.3m ( pounds 42.7m), which gave the company a negative net worth.

The loss for the quarter was dollars 116.3m, or 68 cents a share, compared with a loss of dollars 314m, or dollars 1.88 a share, a year ago. Shares in Wang last traded on the US Stock Exchange at 75 cents on Monday, having lost more than half their value that day.

Wang had delayed the release of its results - which triggered default clauses in a number of outstanding loans - while desperately searching for a new source of capital.

Richard Miller, the chief executive installed three years ago to replace Fred Wang, son of the founder, An Wang, said he tried unsuccessfully to find a buyer for the firm. 'We were trying to raise capital any way we could,' he said.

Wang will make 5,000 of its remaining 13,000 employees redundant, while manufacturing operations will be limited to final assembly work on its VS minicomputers. It will sell computers made by other firms, focusing on big business customers and on developing software, Mr Miller said.

When its debt restructuring is complete, Wang will emerge from bankruptcy with annual revenues of dollars 1.4bn, compared with the dollars 2bn it posted in sales last year, he said.

IBM is selling factories and land at Charlotte in the US and in Bordeaux, France, to Solectron, a US electronics and computer group. The dollars 55m cash deal is unusual for IBM as Solectron will take on the plants as going concerns and become a preferred supplier to IBM. The US computer giant's French subsidiary will take a 10 per cent equity stake in Solectron France, which has been set up to develop the Bordeaux site.