LG.Philips Displays seeks bankruptcy protection

The holding company also announced that it will not be able to provide further financial support to certain loss making subsidiaries because it has been unable to obtain sustainable new or additional funding. LG.Philips Displays Holding B.V. is the European holding company for LG.Philips Displays. Given the holding company's inability to further fund the subsidiaries, its operations in France, Czech Republic, Slovakia, Mexico and the U.S. are also reviewing their financial position. In particular, the workers council of LPD France has been summoned to consider seeking insolvency protection at the plant in France. LG.Philips Displays emphasized that its plants in Brazil, China, Indonesia, Korea and Poland are, in principle, unaffected. The company's factories in the United Kingdom (Blackburn) and the Netherlands (Stadskanaal and Sittard, with support from some employees in Eindhoven) are economically viable and are expected to continue production, for which LG.Philips Displays will seek support and approval of the Dutch trustee and supervisory judge. These operations represent more than 85 percent of LG.Philips Displays' production capacity employing approximately 15,000 people. “Over the past year, LG.Philips Displays and other CRT manufacturers have seen an unprecedented decline in the market for CRTs, especially in Europe. The demand for new flat panel televisions, including liquid crystal display (LCD) and plasma televisions, has surged dramatically, as these alternatives have dropped in price and become cost competitive faster than anticipated. Although demand for CRTs has dropped precipitously in mature markets, global demand for CRTs remains strong, especially in emerging markets. LG.Philips Displays has been in extensive discussions with the company's financiers and parent companies, Philips and LG Electronics, over the past several months to explore financial solutions to the market challenges, especially in Europe. However, these negotiations were ultimately unsuccessful. As a result of the insolvency filings, approximately 350 employees at the company's operations in Eindhoven, the Netherlands and 400 employees in Aachen, Germany are affected. “We deeply regret this outcome and the painful impact these filings will have on our valued employees and the communities that have supported us over the years,” said J.I. Son, President and CEO of LG.Philips Displays. “Unfortunately, market conditions and our financial situation have made this very difficult decision unavoidable.” Effect on Employees LPD employees are being informed of these changes and of their plant's financial position by their local management. “Having explored all possible restructuring options, we really had no choice but to take these actions. We are working to maintain employment for our remaining employees through our ongoing operations,” said J.I. Son. Effect on Customers LG.Philips Displays will work with its customers to ensure continued support to their businesses by providing backup supplies from LPD's ongoing operations. Effect on Suppliers LG.Philips Displays will continue to work with suppliers to its ongoing plants and operations. Suppliers delivering parts and components to the affected plants will be formally notified in due course in accordance with local legislative requirements.