Beta Distribution has incorporated a new entity, Entatech Distribution UK Ltd, sparking rumours that it is gearing up to buy rival distributor Entatech.
Entatech is known to have been extensively marketed in recent weeks - reportedly for £1 - as it seeks a trade buyer who can ease its deepening credit woes.
But hopes of selling the Telford-based outfit as a solvent entity appear to be fading, and earlier today the firm was said to be close to finalising a pre-packaged administration deal with Beta Distribution.
Both Entatech and Beta declined to comment, but proof that a deal was in the offing this week is clearly evident on Companies House.
On 3 May, a new entity, Entatech Distribution UK Ltd, was incorporated on Companies House. It has three officers, namely Beta Distribution itself and two of its directors, including managing director Steve Soper.
Stevinson, who has £2.5m of his own money invested in the distributor, pulled off what many onlookers had thought an impossible coup by reaching a £1.2m settlement with HMRC over a legacy VAT issue last March. He also deserves credit for steadying the ship at a firm that was staring at the prospect of the bank foreclosing on it when he joined as MD in March 2015, onlookers remarked.
However, the distributor's fortunes took a turn for the worse when it lost a contract with key vendor partner Fujitsu last summer. Entatech has since suffered a tightening in the credit available to its key suppliers, as well as a downturn in trade, causing key backer RBS to take a firmer grip on the distributor at the end of April, onlookers remarked. A key contract it holds with Microsoft is also in the process of being re-tendered.
Entatech may be in the process of clearing its debts with HMRC, but the prospect of further unknown liabilities may have put off trade buyers from acquiring it as a solvent entity, sources remarked. In the event of a pre-pack sale, creditors of the distributor will at least yield significant returns for Entatech's creditors, according to one onlooker close to events.
As of Friday afternoon, multiple onlookers told us a pre-pack deal with Beta - that would save scores of jobs - was close to being finalised, but that at least one other distributor was seriously interested. By Friday evening, whether the deal was still a certainty was questioned by one source, however.
CRN got a firm "no comment" from Stevinson, while Beta also declined to comment for the story.
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