Credit Insurance causes Misco UK to cease trading

Three hundred jobs have been lost at Northamptonshire-based computer reseller Misco UK after the operation plunged into administration. The firm has hired FRP Advisory, which said Misco Europe, which continues to operate in Italy, Spain, the Netherlands and Sweden, would not be affected.

Joint administrator Geoff Rowley said: “Misco UK had made great progress since the change of ownership and new investment in March this year but the company’s turnaround plans could not deal sufficiently with the rapid deterioration in cash-flow after the sudden tightening of credit insurance terms.”

The Northamptonshire-based firm’s boss Alan Cantwell was trying to raise additional funds to rescue the company – and he’d had a deadline of the end of play Wednesday to get it done. Having failed the company has ceased to trade.

Cantwell started to cut overheads when he took over the business, making redundancies, closing the Watford office and the warehouse and distribution centre in Greenock, Scotland. But in reality, these actions should have been taken some years earlier.

The death knell came when credit insurers began cutting their exposure to Misco – the same thing killed Comet – and distributors became unwilling to deal with the reseller, with just a few supporting the business until recently.

James Salmon, Operations Director at the Credit Protection Association says “this is just another reminder of the credit risk dangers that can exist for even sizeable operations. Many creditors  will have traded with Misco, unaware of their perilous situation. It is a reminder of the importance of having proper credit checking procedures.”

James Salmon went on to say “This is also a lesson on the dangers of getting into bed with credit insurers”

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