Tech Direct hunts for cash injection

Mail order reseller Tech Direct Europe is understood to be negotiating fresh financial backing after experiencing a number of payment problems, according to sources.

Mail order reseller Tech Direct Europe is understood to be negotiating fresh financial backing after experiencing a number of payment problems, according to sources.

At least one major credit insurer is believed to have cut the Surbiton based reseller's cover last week, restricting its ability to trade and fuelling speculation that it is in discussions with a number of interested parties.

One source, who declined to be named, said: "Basically it is having payment problems, which could mean that it is either on the verge of going under or on the verge of being bought."

Another industry observer said an acquisition proposal was currently being considered by the company. A decision is expected to be made this week, and some job losses are likely.

The reseller, which employs around 70 people and has revenues in excess of £30m, is understood to have been hit by the slowdown in corporate IT spending in the first half of the year. Many organisations are cutting their IT budgets due to overspending on millennium bug preparations.

Tech Direct is also believed to be experiencing difficulties in the implementation of a new IT system, which has led to some cancelled orders.

The company was unavailable for comment.

First appeared in Computer Reseller News