UK's LARGET OFFICE-SUPPLIES-COMPANY ON THE VERGE OF COLLAPSE

[Anonymous]

http://www.google.com/hostednews/ukpress/article/ALeqM5ggoLV563M-moorONcklO7hEUvdlQ
VASANTA : UK’s LARGET OFFICE-SUPPLIES-COMPANY ON THE VERGE OF COLLAPSE
One
of the UK’s biggest office supply companies is reportedly holding last
ditch talks to stave off collapse and secure vital new
funding.Sheffield-based Vasanta Group, which employs around 1,400
staff, has PricewaterhouseCoopers (PwC) on standby to act as
administrator if emergency board discussions fail, according to The
Sunday Telegraph.It is understood the company has been hit by the
withdrawal of credit insurance to key suppliers, which protects
suppliers against bad debt and defaulted payments.Vasanta could be
placed into administration as early as this week if it cannot gain new
funding, it was reported.The group is said to be looking at a possible
rescue deal, with private equity group Alchemy Partners thought to have
been approached.

Vasanta is owned by another buyout firm,
Electra Partners, which revealed in its interim results for the six
months to March 31 that it had written down Vasanta’s value by £28
million, or 95%.Electra said in the results that “the removal of credit
insurance led to a significant increase in (Vasanta’s) debt levels with
a corresponding decrease in the equity value of the
investment”.Vasanta’s principal lender is reportedly part-nationalised
group Royal Bank of Scotland.PwC declined to comment and neither
Vasanta nor Electra were immediately available for comment.

[Author]

July 7, 2009 at 12:16 PM