Micropolis in liquidation: formal announcement

[Mike Bilow]

There was some comment on this earlier, but here is the formal announcement.
 
-- Mike


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                             MICROPOLIS TO WIND UP
                                       
   
   
   The Board of Directors of Micropolis (S) Ltd has decided today to wind
   up the company. This decision was made after a thorough and
   comprehensive review of the Company's financial position and market
   condition.
   
   Background
   
   In April 1996, Micropolis refocused its business on high-end disk
   drives, under the new management headed by Dr Joe Chen. In line with
   the new plans, Micropolis was the first company to ship out the
   3.5-inch 9GB drive in October 1996, as part of its new Tomahawk family
   of enterprise drives. With the launch of the 4GB and 9GB Tomahawk
   drives, Micropolis rebuilt its monthly revenues to US$40m by December
   1996. It was poised to re-establish its niche position as a leading
   high-end supplier for the enterprise market.
   
   By early 1997, R&D was well underway for the new generation of Trident
   drives, with 9GB and 18/20GB capacities, as the successor to the
   Tomahawk family.
   
   However, 1997 proved to be a very difficult year with the entry of
   three more major players in the enterprise storage industry. This led
   to severe price erosion due to excess inventory and capacity. Revenue
   for the first three quarters of 1997 totalled US$140m, far below the
   monthly target of US$45m. Margins were insufficient to cover the
   overheads. Outlook for 1998 is also not expected to improve due to the
   continued intense competition.
   
   Dr Joe Chen, CEO Micropolis, explained, "When we entered the market in
   early 1996, there were only four players, including ourselves, in the
   high-end disk drive market. Today, there are at least seven, some of
   whom are very aggressive. This has led to excess capacity and severe
   price erosion for the industry. It no longer makes any commercial
   sense for us to continue."
   
   In view of this significant change in the competitive environment, and
   the deterioration of expected returns from continuing its business,
   the Board of Micropolis has decided to wind up the Company.
   
   Messrs Michael Lim Choo San, Nicky Tan Ng Kuang and Tam Chee Chong
   have been appointed the Provisional Liquidators. The Liquidators will
   explore all options including the sale of the whole or part of the
   business and/or assets and where necessary the carrying-on of
   operations for the benefit of the company and the creditors.
   
   More about the Micropolis Group
   
   Founded in 1976, Micropolis is a leading designer and producer of
   high-end hard disk drives with operations in Singapore, Thailand, USA
   and Europe.
   
   Total staff strength is about 1,300 in Singapore, 700 in Thailand and
   300 in USA, plus marketing and sales staff in Europe.
   
   Micropolis' business and assets in hard disk drive were acquired by
   Singapore Technologies in March 1996. It became a wholly-owned
   independent subsidiary of Singapore Technologies.
   
   Released on November 10, 1997
   
   
   For further information, please contact :-
   
   Dr Joe Chen
   President & Chief Executive Officer
   Micropolis (S) Ltd
   Tel No: 4859880


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                          FREQUENTLY ASKED QUESTIONS
                       ON THE LIQUIDATION OF MICROPOLIS
                                       
   
   
   With the announcement of the winding up of Micropolis, a number of
   questions were raised by customers and suppliers. Below are some of
   the frequently asked questions : -
   
   Customers' Questions
   
   
        Q1      I just bought some Micropolis drives. What about
   warranties?
   
        Ans     The liquidators will be working out solutions to provide
   warranty support. Please give them some time to assess the financial
   position of the company before they get back to you. For further
   details, please contact liquidator Mr KT Chan at Tel : (65) 330-1241
   or fax your queries to Micropolis at Fax : (65) 481-8119.

        Q2      I have just bought some Micropolis drives. Can I return
   them?
   
        Ans     The liquidators are reviewing the situation. Please put
   your request in writing to the liquidators with the details of your
   purchase so that the liquidators will be able to decide what is the
   appropriate action in your case. For further details, please contact
   liquidator Mr KT Chan at Tel : (65) 330-1241 or fax your queries to
   Micropolis at Fax : (65) 481-8119.

        Q3      Micropolis produces excellent drives. Why could it not
   continue business?
   
        Ans     Yes, Micropolis has had a niche position as a leading
   high end producer, known for its innovation and excellence in drive
   technology. This was the reason why ST thought it would be possible to
   help turn the company around under a new management team to establish
   it as a profitable company.
   
   However, with the new aggressive players in the high end market in
   1997, it is no longer viable for Micropolis to continue its business.
   
   Suppliers' Questions
   
   
        Q1      We have outstanding debts with Micropolis. When can we
   get back our money?
   
        Ans     If you have any claims with Micropolis, please put your
   claims in writing with full details and send to Micropolis. The
   liquidators will assess the claims and respond to you. For further
   details, please contact liquidator Mr KT Chan at Tel : (65) 330-1241
   or fax your queries to Micropolis at Fax : (65) 481-8119.
   
   Buyers' Questions
   
   
        Q1      We would like to buy Micropolis drives. Who can we
   contact?
   
        Ans     Please contact Micropolis sales manager, Mr Simon Lee at
   Tel : (65) 9-8192144 or Fax : (65) 482-4193.
   

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