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NEWS FLASH: Siltek shuts up shop

NEWS FLASH: Siltek shuts up shop

It's official. Long embattled distributor Siltek Asia Pacific is no longer trading.

The dogs have been baying for months over the fate of the distributor but it wasn't until late last night that the death knell came from Siltek's Johannesburg headquarters with a directive to cease all operations.

According to sources in contact with ARN, accounting firm PWC, which has been looking into options for the South African-based Siltek Group's Australian operation for some months, told employees on Wednesday evening that the entire company was to be closed up and that all staff were being made redundant in Siltek's Sydney and Melbourne offices.

No one was answering the phones at the distrubutor's Sydney or Melbourne office this morning.

The news comes after negotiations by two prospective buyers broke down last weekend over price. ARN can reveal the two prospective buyers were the Australian operation of Asian white box and components distributor, Synnex, and a consortium led by former Siltek CEO, Hugh Evans.

It is understood that Siltek closed its doors with debts in the vicinity of $10-12 million according to a former employee of the company. Hewlett Packard is said to be the largest creditor with $5-6 million in outstanding debt.

According to the source, PwC auditors are unable to confirm whether Siltek's redundant staff will receive their full entitlements.

Hewlett-Packard and other creditors are likely to get some return on their debt as it is believed the company folded with approximately $6-7 million worth of stock and $7-8 million worth of debtors accounts.

Hewlett Packard is the parent company's biggest vendor partner in its core South African operations.

Sources close to Siltek said the company just could not afford to go on without further radical changes or a fresh injection of capital. Despite revenues of about $4-5 million per month the company was "losing money everyday" according the source.

At the time of posting this story, a spokesperson for PwC said the company was unable to comment on its clients.

HP was also unavailable for comment.


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