One of Europe's last surviving independents, Holland's Tulip Computers, has filed for bankruptcy protection, though there is hope that its UK subsidiary may survive as a going concern.
Tulip blamed the cancellation of credit facilities by a major financial partner, which had made it unable to pay creditors. It therefore issued a statement, saying it had been "forced to apply for a suspension of payments, which has been granted by the court of Den Bosch". Court administrators have been appointed.
Tulip, which employs 700, has been in the red for two years and, a month ago, admitted that 1998 would be its "make or break year" as it struggled to compete with larger US rivals in an increasingly cut throat PC market.
On 17 March, it reported a loss for fiscal 1997 of Fl25.7 million ($12.7 million), three times the deficit of the year before, and on sales that fell 13 per cent to Fl 461.4 million.
For a PC vendor turning over less than #300 million a year, Tulip spread itself very thinly. It is listed on the Amsterdam Stock Exchange and operates sales offices in 18 European countries. The company also has more than 40 distributors worldwide, and regional sales offices in Hong Kong and China.
In Holland, the company operates a state of the art manufacturing plant, which has a production capacity of 600,000 units a year - but start-up problems at the latest plant at its Den Bosch complex was one reason for last year's poor figures. The plant is likely to be the jewel in the crown in any sell-off, particularly for PC makers moving into build to order business in the European region. On the company web site, Tulip touts its build to customer order capabilities, which it pioneered ahead of many larger US rivals.
Outside the Netherlands, where Tulip is the third biggest PC vendor, the company is a bit player, although its UK subsidiary is said by sources to be cash rich and has the potential to survive as an independent operation. Even in Holland, however, Tulip's market share has shrunk from 3.4 to under one per cent in the past year.
Although Tulip blamed its problems on many of the factors affecting all PC makers - the Asian economic crisis, currency rates, excess inventory and so on - it also had unique pressures. Last September, it launched an FL21.5 million rights issue to acquire retail PC brand Commodore from the receivers. At the time, many analysts questioned the advisability of splashing out on the collapsed company at a difficult time for Tulip itself.
Tulip also obtained a loan of Fl25 million to help finance the Commodore deal. The loan?s AA rating indicates the company was thought to be in good financial health at the time, but some observers feel the purchase, in addition to production hitches, stretched an already pressurised company too far.
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