iAsiaWorks Details Challenges
Provider has laid off 75 percent of workforce, missed payments

August 16, 2001 -- International colocation provider iAsiaWorks, Inc. said this week it has laid off 75 percent of its staff, liquidated its Hong Kong subsidiary, and is working with creditors to avert a bankruptcy filing.
"Over the last several months we have reduced our headcount from more than 400 employees to approximately 100 employees today," Jon Beizer, iAsiaWorks' CEO, said in a press statement.
"In addition to dramatically reducing our cost structure, we are working with all of our major creditors in an effort to restructure our debt," added Beizer. "Over the last few months, we have missed many of our scheduled payments and, in order to continue to operate without filing for bankruptcy protection, we must secure the cooperation of our creditors."
The company has been pursuing new financing for nearly a year, and needed $60 million to fully fund its business plan. It has not been able to raise the money, the company said today, and is scaling back its business plan to conserve cash.
"Previously, we operated in each of the major Asian markets and the United States," said Beizer. "We now only service customers in Taiwan and Korea -- the two countries where we own and operate IDCs.
In early July, iAsiaWorks began liquidating its Hong Kong subsidiary. The company took a charge against earnings of $60.2 million for the second quarter in connection with the restructuring. iAsiaWorks had a net loss of $103 million for the quarter, or $2.59 a share, with revenues of $7.8 million.
Beizer said iAsiaWorks is continuing to seek funding.
"We have been in discussion with several different parties that are interested in buying assets or providing us with additional capital," he said. "Our objective is to raise enough capital to satisfy our vendors and provide cash to grow the remaining businesses.
"Assuming we are able to raise new capital and restructure our debt, we continue to believe that we have the premier facilities in Taiwan and Korea and that long-term demand for hosting services will be strong," he added.'
iAsiaWorks, an Asia-Pacific Internet data center (IDC) company, offers colocation services in Taiwan and Korea.