Qintex Is Solvent, Chairman Contends

Australian television magnate Christopher C. Skase, under pressure from banks and regulators after the failure of his takeover bid for Hollywood’s MGM/UA studio, declared that his Qintex Australia company is still solvent.

Skase, Qintex chairman, has spent much of the past two days huddled with his bankers after announcing that the company had run into a $150-million ($200 million Australian) drop in cash flow.

The flamboyant Skase, who until this week was regarded as one of Australia’s richestpeople, found that his aborted $1.5-billion takeover bid for the studio left him strapped for cash.

Shares of Qintex Australia and those of its 53% owner, Qintex Ltd., have been suspended from trading on the Australian Stock Exchange since Monday amid concern about their U.S. associate’s application for bankruptcy protection.

In a statement Thursday in response to stock exchange queries about his finances, Skase said Qintex Australia could meet its financial commitments with the continued support of its lenders, who had been presented with its business plan for the financial year.

“The group’s bankers are reviewing the information presented,” he said.

Skase stuck by his forecast, made earlier this week, that Qintex Australia’s profit before interest, tax and depreciation for the year to July 31, would top $128 million ($170 million Australian) despite the reduced cash flow.

But he said the results were not yet final and had not been approved by directors and auditors.

Qintex Australia’s crisis was triggered by its 43%-owned Qintex Entertainment Inc., which filed for protection from creditors over a $5.9-million loan last Friday.

Skase said Qintex Australia had made unsecured loans of almost $38 million ($50 million Australian) to Qintex Entertainment.

Qintex Entertainment’s $35 million in bank loans was secured on its assets, supported by a Qintex Australia guarantee, he said.

Skase has already announced plans to sell assets to help solve Qintex Australia’s debt problems.