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International Business, 8th Edition by Michael H. Moffett, Iikka A. Ronkainen, Michael Czinkota

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PART 3 CASE 6

NINE DRAGONS PAPER*

NINE DRAGONS DENIES REPORT OF BANKRUPTCY

China's Nine Dragons Paper (Holdings) Limited is denying media reports that it would declare bankruptcy at the end of 2008 and says its finances are fine, Bloomberg reports. The Guangzhou, China based Times Weekly reported on Dec. 25 that an unidentified Nine Dragons official said in an unidentified web posting that the company would declare bankruptcy because it couldn't repay a loan worth $75 million.

“Such articles have no basis in fact,” Nine Dragons said in a Hong Kong stock exchange filing on Dec. 29. “The company is not involved in any bankruptcy, liquidation, or winding up proceedings and the company's financial situation is sound and stable. Operations are normal.”

Nine Dragon's profit for the six months ended June 30 fell 22 percent from the same period a year earlier.

—Official Board Markets, 3 Jan 2009, p. 13

THE GLOBAL RECESSION

“This time is really different. Large and small are all affected. In the past, the big waves would only wash away the sand and leave the rocks. Now the waves are so big, even some rocks are being washed away.”

—Cheung Yan, co-founder and Chairwoman of Nine Dragons Paper1

Incorporated in Hong Kong in 1995, Nine Dragons Paper (Holdings) Limited, had become an international powerhouse in the paper industry. The company's primary product was linerboard, with a product line including kraftlinerboard, testlinerboard and white top linerboard in a portfolio of paperboard products ...

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