updated 3/23/2005 3:32:25 PM ET 2005-03-23T20:32:25

The Latin America subsidiary of America Online Inc. is running low on cash and may shut down or seek bankruptcy protection if it isn't sold in a "timely manner," the company said.

The Fort Lauderdale-based Internet service provider said "no definitive decision has been made to cease any particular operation at any particular time."

The company said it could seek bankruptcy protection in the United States or in another country where it operates, though any decision would require approval from preferred stockholders and the company's board.

AOL Latin America has 400,000 subscribers in Brazil, Argentina, Mexico and Puerto Rico as of Sept. 30, a drop of 18,000 from the previous quarter.

The company only has sufficient cash to keep operating into the third quarter of 2005, according to a filing Tuesday with the Securities and Exchange Commission. As of Sept. 30, it had $25.2 million in cash and cash equivalents. It posted a $23.6 million loss in the third quarter 2004.

The company also said its owners, Time Warner Inc., the Cisneros Group of Companies and Banco Itau SA, will not provide additional funding, and no other cash sources have been found.

Since May, the company has been unsuccessfully trying to find a buyer, although it said it has received some "expressions of interest."

Time Warner owns $160 million of the company's convertible bonds and can take proceeds from any sale to repay them, the filing said. But the company said that even if it is successful in selling the entire business, the proceeds won't be enough to repay other debts, and none will left for holders of its common stock.

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