Entatech close to resolution with Changtel liquidator
Distributor says breakthrough in negotiations reached today will allow it to execute on strategy
Distributor Entatech has today reached a non-binding heads of agreement with the HMRC-appointed liquidator of former sister company Changtel Solutions, its managing director has told CRN.
Entatech revealed in its annual accounts last month that the liquidator made a potentially devastating claim against it in relation to assets it acquired from Changtel before it was spun off from the Enta group in 2014. It said at the time it was hopeful of reaching an early settlement.
Entatech managing director Dave Stevinson (pictured) said he hoped today's breakthrough in the negotiations, although not a final settlement, will eradicate any uncertainty surrounding the hardware and software distributor's business.
"I can confirm that a non-binding heads of agreement has been entered into earlier today," he said.
Stevinson was unable to divulge any details but said the agreement "gives us the vital elements of affordability and flexibility and allows us to execute on our strategy".
Former Enta UK owner Jason Tsai took the decision to offload Changtel - an export-focused business formerly known as Enta Technologies - to a private investor in January 2014. Tsai subsequently told CRN the move was designed to insulate Enta from its battle with HMRC over alleged unpaid VAT.
After an unsuccessful appeal by Tsai to the High Court, HMRC succeeded in its bid to wind up Changtel and a liquidator was appointed in June 2015.
Stevinson, who joined Entatech last March, said the aim now is to draw a line under the saga and invest in and transform the business.
"Entatech has had a very strong end to 2015, particularly in Q4, on the key measures we look at, which are revenue and margin," he said.
2015 was a year of "extreme investment" for Entatech, Stevinson said, as the distributor rolled out a new ERP system and hired a squad of legal, audit and tax consultants to rectify the distributor's legacy issues.
"When I took over, the first thing we did was change the board of directors and significantly strengthen our financial rigour. Key investments were made in source systems; ERP, analytics and business intelligence."
He added: I have focused the majority of my time and effort on seeking resolution and it's not just a case of getting a deal, but getting the right deal, for both parties; one that allows us to grow and invest in the areas we see opportunites for our partners and customers."
The Telford-based distributor, which offers a range of hardware, software and components from the likes of Fujitsu, Corsair and Microsoft, saw turnover hit £119.7m in its fiscal 2015.
Stevinson concluded: "We have been impressed with the pragmatic approach of each party [in the negotiations]. Everyone has taken time to deeply understand our position and vision, and we feel we've been backed 100 per cent."