EXCLUSIVE: Onkyo Insolvent, Struggling To Stave Off Bankruptcy
Ambertech brand Onkyo Corporation is insolvent and desperately looking for a solution to keep the business from bankruptcy.
The Tokyo Stock Exchange has given the Japanese Company whose products are sold at Harvey Norman a limited window to get their affairs in order before a forced delisting from the JASDAQ stock exchange is implemented.
The Company recently announce a massive decline in revenues and record losses due in part to COVID-19.
The company blamed several variables, including COVID-19, for their dismal results in the last fiscal year.
A major concern is that one of their large factories in Malaysia was forced to close down by the Malaysian Government with the Company complaining that despite the forced closedown they were still racking up debt due to outstanding payments.
Onkyo said that their 2020 global revenues dropped 49.3% to $200.4 million or 49.3% they had revenues of $395 million in fiscal 2019.
The company booked a record net loss for the year of $90.8 million, as compared to a small profit in 2019 of $306,000.
Analysts are calling it a “dramatic shift in fortune”.
Onkyo, has been in decline for more than a decade, losing money every year since 2013 a situation that has impacted the Company’s ability to sell the business.
Last week Amber Tech were told that they had lost the Integra business, now they are facing the loss of their Onkyo business.
There was a rumour going around that Onkyo was in bankruptcy, but that rumour is false – at least as of the time of this writing wrote one analyst.
The company has not filed for bankruptcy protection.
Insolvency is not bankruptcy – insolvency is a state of being unable to pay bills, where an individual or a business finds itself in a situation where it does not have the cash or the assets to pay their debts or liabilities.
A major problem for Onkyo emerged in 2012, the company thought they had found an answer to their trading problems when up popped Gibson Brands who took over control of Onkyo USA, 6 years later Gibson Brands was placed into bankruptcy with multimillion dollar debts.
They then tried cutting a global brand deal with TCL and selling off their European operations – at one time the most profitable part of the company.
In May 2019 signed a deal with Sound United to sell them the audio division but this went nowhere with Sound United pulling the plug on the deal, due to certain unspecified conditions not being met.