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08/10 06:21
Lernout to Offer Dictaphone Creditors Shares in a New Company
By Cecile DauratBrussels, Aug. 10 (Bloomberg) -- Lernout & Hauspie Speech Products NV, the Belgian maker of speech-recognition software under bankruptcy protection, will turn its U.S. Dictaphone unit into a new company and give shares to its creditors. The unit's creditors, which include Lernout & Hauspie itself, banks and bondholders, agreed ``in principle'' to create the company, Chief Executive Philippe Bodson said in a press conference. He declined to give further details. ``It opens the way to a final solution for Dictaphone,'' which is also under bankruptcy protection, Bodson said. ``Dictaphone will continue to operate as it has.'' Lernout & Hauspie ran into payment problems in November after borrowing $430 million last year to buy Dictaphone, a U.S. maker of recorders used by doctors, and Dragon, a software maker. Bodson, appointed in January, is now trying to sell units or create new companies for its different technologies to salvage the business. The software maker has enough money to survive until the end of October, Bodson said. Lernout & Hauspie expects the court will ``quickly'' approve the sale of its translation unit Mendez for $44.5 million to Bowne & Co. The company is also trying to sell three other units, including a transcription arm, he said. Lernout & Hauspie has said it is also considering turning its speech-recognition unit into a new company and allowing creditors to exchange their debt for shares. The unit, which includes Dragon, is spending more money than it earns because it's developing new systems, Bodson said. It needs to raise money and Lernout & Hauspie will continue to talk to potential investors who have expressed an interest, he said. ``I can not guarantee we'll get any'' firm bid, Bodson said. ``The climate is not favorable for venture capital and the Lernout & Hauspie name has scared a lot of people.''

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