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10 Oct 2005
In another blow for the distribution sector, CRN has learnt that Staffordshire-based distributor Mitek Computer Components is believed to be entering into a Company Voluntary Arrangement (CVA) this week.
Mitek’s troubles follow another tough week for the industry, which last week saw Abtec International and East Central go into administration (CRN, 3 October).
A meeting of creditors, which CRN understands will include Computer 2000 (C2000), Microtronica and Bell Microproducts, is due to be held in St Albans, Hertfordshire this Friday where the firm will officially enter the CVA.
Nitin Joshi, director at accountancy firm Vantis, which is acting as the nominee for the CVA, said: “The intention is to have the CVA for two years or less to allow the company to discharge its debts to creditors.
“When the VAR channel is in turmoil, distributors lose money through bad debts and it has a domino effect. A lot of businesses are going through similar structural changes, but the good thing is this CVA is supported by the major creditors.”
Malcolm Roach, managing director of Mitek, told CRN the CVA was the best way
forward.
“This reconstruction is the best possible outcome for all our trading partners.
We have the Optronix business well established and that will present further
trading opportunities for our suppliers. We were badly let down by some of our
customers and we incurred quite a lot of bad debt, even though they passed our
vigorous credit-screening processes.”
Eddie Pacey, director of credit at Bell Microproducts, said: “We have known Mitek for a long time and are aware that it is having some problems. We support the CVA because it is potentially a route for getting something back, whereas the alternative is getting nothing.”
Steve Lockie, managing director of C2000, added: “This kind of situation is never easy. We continue to hold dialogue with Mitek at this time.”
Les Billing, managing director of distributor Microtronica, said: “Mitek is a victim of tough market conditions. The main players remain strong, but the smaller firms that do partial distribution and are not really pure distributors, are going to be further squeezed by those at the top.”
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