Multinational credit insurer Euler Trade Indemnity (ETI) has pulled its cover for components distributor Computer 3000 (C3000). The distributor's cover was said to be worth about £750,000.
It is now seeking extra funds from vendor partner IBM. ETI has also issued C3000 with a nil-endorsement notice, or P13, that removes any discretionary cover it provides.
Colin Yeates, marketing manager at C3000, confirmed that ETI has pulled credit on the firm. "It is a delicate time for the company. We are in talks with ETI on a daily basis about the decision, which we believe is premature," he said.
Keith Warburton, executive director of non-profit IT trade organisation the Personal Computer Association (PCA), was sympathetic to C3000's case. However, he added that by "simply being in the computer industry" any company is at risk in the current economic climate.
ETI declined to comment on C3000's credit status. Speaking to vnunet.com's sister publication Computer Reseller News last week, Keith Morris, ETI's deputy chief executive, denied PCA claims that it is reducing its exposure in the IT industry.
The company does not have a habit of "pulling out of the market at a moment's notice because we don't like it this week," he said. Morris added that the insurer does not have a sector monopoly, but admitted that it possessed a "significant share" of the market.
"Companies come to us because we have an established reputation for being a long-term player in the IT market," he said.
C3000 also confirmed that it has had difficulties with the Royal Bank of Scotland in recent weeks and has taken the bank to court for breach of contract over a factoring agent services agreement.
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