The South African parent of IT distributor Siltek Australia has applied for provisional liquidation, just three months after forcing the closure of its Australian subsidiary.
In a recent press conference, Siltek CEO Dave Lello said the holding company was "technically insolvent" and could no longer operate due to mounting debts.
Siltek's warehouse in Midrand, South Africa has been closed and shipments cancelled. Earlier in the month, the company's shares were suspended on the Johannesburg Stock Exchange after it delayed its end-of-year financial results.
Siltek's principal subsidiary, SDD (Siltek Distribution Dynamics), is the largest IT distributor in South Africa. It is expected that the closure will have a significant impact on the country's channel.
Lello has suggested that some of the business units of the company are break-even if not profitable, but the holding company is far from it. Particularly draining for the company is the distribution of IT hardware. Lello does not expect struggling South African resellers to be able to cough up the $A64 million they owe the distributor, he told the news conference.
Lello blamed a faulty accounting system for a further $21 million of the holding company's debts, and a further $34 million on the closure of Siltek Australia.
It is expected the company will now attempt to sell off profitable business units.