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By | Tony Smith 21st January 2005 11:28

ABIT reaches accord with creditors - report

Cash deposits may be unfrozen

Motherboard maker ABIT may have reached an agreement with its creditors to defrost cash and credit lines frozen last month.

The deal - described by sources close to the company, cited by DigiTimes, as "tentative" - will allow the company to make use of those assets for its business operations.

ABIT had TWD1.65bn ($51.8m) of cash and other short-term assets at the end of November 2004. However, a sizeable portion of that sum was frozen last month by the company's banks after it became the subject of accounting fraud allegations. The Taiwanese Stock Exchange downgraded ABIT's stock.

It's not known how much cash is tied up in the banks, but DigiTimes' sources claimed that they expect ABIT to show how it intends to pay off its debts before they will release its deposits. It is said to have a deadline of 10 March to submit the plan and a copy of its 2004 financial report. Failure to do so could see recently opened lines of credit closed off, the report notes. ®

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