Network SI calls in corporate recovery firm to solve cash woes

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Network SI calls in corporate recovery firm to solve cash woes

Microscope contributor

Network SI has appointed RSM Tenon to help deal with its current financial instability and find a buyer, with the hosting unit likely to be sold imminently as part of a pre-pack administration.

The West Midlands-based SME's managing director Brian Bennett passed away before Christmas and director/shareholder Brendan Nolan was parachuted in to run the operation temporarily, but with turnover dropping and customers taking their business elsewhere it called in Tenon.

"We were asked to assist the directors with the current financial affairs, seek purchasers for the business and deal with this potential pre-pack administration," Clive Jackson, insolvency manager at RSM Tenon told MicroScope.

He confirmed it had accepted an offer for the hosting business, which represents around half of Network SI's turnover and it was in the process of drafting contracts, "obviously an administrator will then be appointed".

However, he added it was unlikely that the retail and support side of the firm would be sold, "it doesn't really have any goodwill or attachments going forward that would be interesting to a purchaser."

Only 20 to 30 employees remain at Network SI, which is an HP Preferred Partner, and carries the Microsoft Gold and Citrix Silver accreditations.

In last filed accounts for the year to 30 June 2009, sales stood at £6m, it had a net asset value of £312,000 and £1.5m worth of creditors.

Jackson said turnover had fallen in the intervening 18 months but was as yet unable to detail the list of creditors. 

Sources in the channel suspected that a few suppliers may be left out of pocket as a result of the company's pending collapse.


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