Lernout & Hauspie will learn today if it can proceed with a $60 million rescue financing-agreement with Ableco Finance, a lender specializing in making secured loans to troubled or bankrupt companies.
Lernout & Hauspie is the parent company of Dictaphone and speech-recognition specialists Dragon Systems. Earlier this month the company won bankruptcy protection in the Belgian courts.
The company is awaiting a decision by a US court this time. The court will decide if the rescue package from Ableco Finance can proceed.
Pay off One third of the $60 million package is earmarked to pay off General Electric Capital's $20 million bridging loan to Lernout & Hauspie offered late last year. The remainder will fund Lernout & Hauspie operations, according to a source close to the financing deal who requested anonymity.
Ableco's terms are reported to include first refusal on any L&H assets in case of bankruptcy, fees totalling about $1.5 million and interest charges of 9.5 per cent on the financing.
L&H filed for bankruptcy in Belgium and the United States last autumn. It is also under investigation on both sides of the Atlantic following revelations of a $100 million cash shortfall from the company's Korean unit.
A new chief executive - the third in six months - was appointed last week. Philippe Bodson was chosen as much for his US financial contacts as for his track record as a manager, according to financial analysts in Brussels.