Company in default of $7 million in secured loans it received late last year.Sagent Technology Inc. has been declared in default of $7 million in secured loans it received late last year, a move which could force the company to be sold.
The data warehousing and enterprise integration software vendor announced Friday that it received notice of the default from CDC Software Corp., a wholly-owned subsidiary of Chinadotcom Corp. CDC had loaned Sagent $7 million in October of last year and has declared the entire principal amount due, seizing $4 million from Sagents deposit accounts.
Sagent officials said in a statement that they plan to contest the action, noting that the company has kept current with interest payments on the debt and was not required to begin paying off the principal until Oct. 24, 2004.
Sagent is also seeking to refinance its existing debt or sell all or part of the companys assets, officials said.
CDC announced in a statement that it was taking action against Sagent "based upon the occurrence of certain events of default" under the terms of the loan. It did not elaborate as to what those elements were.
CDC Software is the software development arm of Chinadotcom, the company that runs the China.com Web site. CDC develops an enterprise application suite and localizes and resells other software vendors products in China and neighboring countries.
Last October, CDC and Sagent had also entered into a strategic partnership that called for CDC to resell Sagents technology in the Asia-Pacific region.
Sagent Chairman and CEO Andre Boisvert said at the time that Asia-Pacific was Sagents fastest-growing geographical market and the CDC partnership would help expand the Mountain View, Calif.-based companys market reach.
The $7 million loan CDC made to Sagent at that time was intended to help Sagent generate positive cashflow from operations, Boisvert said then.
In its most recent quarter ended Dec. 31, Sagent reported a net loss of $2.8 million on $8.5 million in revenues. The company lost $2.1 million from operations.
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