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Elcoteq's Credit Troubles Lead to Bankruptcy

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elctrnx_lyf
User Rank
Supply Network Guru
nokia effect
elctrnx_lyf   10/13/2011 12:40:00 PM
NO RATINGS

elcoteq was dependent on nokia in a very big way and may be because of nokia sales dip elcoteq might be affected. Any idea who will be the other companies that are going to follow the trend?

eemom
User Rank
Supply Network Guru
re:
eemom   10/13/2011 11:20:23 AM
NO RATINGS

I also find it surprising that Elcoteq is putting much of the blame on the lenders.  In these economic conditions, lenders have to be selective as to who they lend their money to.  Although, with Elcoteq declaring bankruptcy, I'm not sure the lenders are in any better shape in recovering their money.

The stats you list as to the financial health (or lack thereof) of 44% of high tech companies is quite distressing.  How will this affect innovation, product development as well as availability.  The outlook is meek and scary.

 

Jay_Bond
User Rank
Supply Network Guru
re:
Jay_Bond   10/13/2011 7:12:27 AM
NO RATINGS

Even in light of the most recent economic turmoil, Elcoteq's lenders obviously saw issues with the company’s long term status. These lenders have to be cautious, but without lending money they don't make money. There have been obvious signs in the past year that Elcoteq was having issues. I'm sure when their business plan was presented to the lender(s), they weren't confident in success and felt like it was time to cash in.

Jacob
User Rank
Supply Network Guru
credit and Bankrupt
Jacob   10/13/2011 4:53:26 AM
NO RATINGS
1 saves

If companies are giving credit facilities to distributors, this can happen. I think we had discussed about the same credit issue problem sometimes back. Financial health of the company matters very much in long term run. All the company activities are built on credit and overdraft facility, in a concept that cash/money is revolving.



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