VLSI hopes sale will keep it trading

The receiver acting for struggling hardware components distributor VLSI International is advertising the company for sale this week in the hope of finding a buyer willing to take it on as a going concern.

The receiver acting for struggling hardware components distributor VLSI International is advertising the company for sale this week in the hope of finding a buyer willing to take it on as a going concern.

The Hayes-based company went into administrative receivership last week following cashflow difficulties, according to accountancy firm Horwath, Clark, Whitehall, which has been appointed as receiver.

"The company asked to be placed into administrative receivership," said Simon Thomas, a partner at the London-based accountancy firm, adding that the business will be advertised for sale as a going concern. "VLSI will continue to trade as normal to avoid disruption to creditors and customers," he added.

Thomas said it is too early to comment on how much money is owed to creditors, but stressed that they are all being kept fully abreast of the situation. He declined to comment on the future of VLSI's employees.

The distributor specialises in hard drives, microprocessors, motherboards, memory and keyboards. Its suppliers include Quantum, Seagate, Intel Fujitsu, AMD and IBM.

Nitin Joshi, director at accountancy firm Pannell, Kerr, Forster (PKF) said the troubles suffered by VLSI are common in the marketplace at the moment. "The company has been brought down by a heavy burden of debt," he said. "PKF is currently talking to other operations in the components sector and the signs are not good for these types of businesses."

Supporters of distribution outfits, from credit insurers and bankers to factors and suppliers, will view the sector with added caution following recent events, he said, adding that they would be "quite right to do so".

Distributor Datrontech went into receivership last year following cashflow troubles and a series of disappointing financial results.

No one at VLSI was available for comment.

First published in Computer Reseller News