Electro-Wide falls into administration

Cash-Flow Welsh systems builder leaves million-pound debt pile.

West-Glamorgan based systems builder Electro-Wide has plunged into administration, leaving debts believed to be up to £3 million.

Lisa Thomas, insolvency administrator at Stones Jones, which is handling the Electro-Wide case, confirmed the operation went into administration on 20 February. She also confirmed that Northamber was the largest trade creditor, owed about £1.5 million, and was backing Electro-Wide's move into administration.

Thomas added that a report was being prepared and would be complete within 28 days. She also said that Electro-Wide wanted to continue trading.

Northamber recently increased its debtor provision, citing 'current consolidation within the smaller unbranded PC assembler marketplace' and 'component distribution activities to that sector'. The distributor refused to comment.

Electro-Wide was selling PCs under the name Atlantic through Staples, Ryman and Debenhams. It withdrew from Debenhams and Ryman before Christmas, but remains on sale in Staples. A salesman at Staples said it was waiting for more stock, but still had some models in the store.

According to one source, the problems came in the wake of the OEM's legal tangle with Microsoft. Electro-Wide paid Microsoft £120,000 in settlement after the High Court ruled it had infringed the software giant's copyright by selling unauthorised software (PC Dealer, 18 May 1997). He added that Electro-Wide had followed an aggressive price policy, selling PCs for £50 to £200 less than rivals, which it could not maintain.

According to records at Companies House, Electro-Wide had a 51 per cent share in Atlantic Business Systems and Customer Engineering. Karen Shute, managing director of Atlantic Business Systems, claimed: 'We have no connection with Electro-Wide any more.' She added that Electro-Wide's controlling interest had been sold off in June 1997.

Last year, Electro-Wide posted a pre-tax profit of £103,498 on turnover of £8.8 million. The company was unavailable for comment.