One of China's top three television makers Sichuan Changhong plans to take over bankrupt U.S-based distributor Apex Digital, which owes Changhong about 470 million US dollars.

The 21st Century Business Herald newspaper quoted an unnamed Changhong source as saying that taking over Apex will provide Changhong with direct access to the U.S. market and retailers such as Wal-Mart Stores.

He said the purchase will also indirectly resolve Apex's bad debts with Changhong.

The newspaper said Changhong will draft a detailed purchase plan by February nine.

Apex owes Sichuan Changhong 467.5 million dollars and the Chinese TV-manufacturer has said only some 150 million dollars will be recovered based on an evaluation of Apex's assets.

Chen Yuanwang, an analyst at Huaxia Securities, said "the purchase of Apex could very possibly be the only option for Changhong to solve its bad debt problem with Apex."

The 467.5 million dollar debt would likely be sufficient to cover the purchase, Chen said.

It was unclear how Apex racked up its losses in its distribution partnership with government-run Changhong.

Apex president, David Ji, a naturalized US citizen from China, was detained in October in the southern city of Shenzhen over alleged fraud related to bank bills.

Changhong said last month its full-year income would be hit by its exposure to its largest overseas buyer, Apex.

It posted a 46.86 percent year-on-year fall in net profit to 82.79 million yuan for the first nine months of 2004.

Source: CRI News