America Online Latin America Inc., an Internet service provider partly owned by Time Warner Inc., said it may file for bankruptcy protection because it doesn't have enough cash to pay its debt and fund its business beyond September.
AOL Latin America is not looking more money "because we believe that any efforts to obtain financing would be futile based on past experience," the company said in a filing with the Securities and Exchange Commission.
The company also said it won't be able to obtain additional financing from New York-based Time Warner Inc., Venezuela's Cisneros Group of Cos., Brazil's Banco Itau SA "or any other source."
Based in Fort Lauderdale, Fla., AOL Latin America operates in Mexico, Brazil, Argentina and Puerto Rico and has struggled to compete with larger rivals such as Spain's Telefonica SA. Time Warner owned 29.7 percent of the company as of December, according to Bloomberg data.
AOL Latin America also said Tuesday that its stock has no value. Even if the company manages to sell part of its businesses, none of the proceeds will be available to shareholders, it said in the filing.
Shares of AOL Latin America fell 3 cents, or 6 percent, to 47 cents in Nasdaq Stock Market trading. They dropped more steeply in after-hours trading. As of 8 p.m. Eastern time, shares were changing hands at 21 cents.
Among AOL Latin America's statements was that it doesn't have enough money to reimburse the $160 million it owes to Time Warner. Time Warner will continue to monitor the "need to adjust our investment for impairment issues," spokeswoman Trisha Primrose said. "It will not have a significant impact on Time Warner financial results," she said.
AOL Latin America, which sold shares in an initial public offering in August 2000, has accumulated $882 million in losses since the beginning of 2000.
The company has faced "strong price competition" in Brazil and Mexico, it said in a Nov. 9 statement. AOL Latin America Chief Financial Officer Osvaldo Baños did not return calls seeking comment.
