Desperate Dan cuts its losses

PC builder slips into receivership

Despite a desperate battle to keep its head above water, PC builder Dan Technology has entered into voluntary administrative receivership.

The firm, which put its assets up for sale as a going concern earlier this month, has appointed London-based BDO Stoy Hayward as administrative receiver.

Dan managed to narrowly avoid going into receivership at the beginning of the year by raising £2.5m in extra capital through a consortium of private investors which then took over the company.

However, according to Gary Sacks, a representative for Dan's shareholders, the ongoing credit squeeze was a major factor in the company's downfall. "We took the business on three months ago, based on projections given to us under the understanding that credit lines would be restored," he said.

"This failed to happen, and with a bad March and April turnover we found it difficult to justify investing more money in the business."

Sacks added that the decision was made to "cut our losses". Since the initial cash injection, the consortium of investors have lost about £1m. "However, it is a very good business proposition with a strong upside and has attracted quite a bit of interest," he said.

Sacks said the current management?s priority is to save the jobs of the 120 remaining employees at the firm.

Several companies have expressed an interest in the business, but no names could be disclosed at this stage, he added.

Nitin Joshi, head of the computer sector at insolvency specialist PKF, said: "Sadly, this has all the hallmarks of Desperate Dan rather than Dan Technology. Receivership seemed inevitable and whether anything can be salvaged remains to be seen. The current climate for system integrators is poor."