New stance on bad dept for Logicom

Distributor enlists services of credit insurance agency

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By  Published  November 29, 2006

Logicom has admitted that it is taking a more cautious approach to dealing with resellers in the Middle East following the US$6.1m debt it was left with after this summer’s Dubai credit crisis. The distributor has just hired the services of insurance firm Atradius to cover it for future bad debt.

Demos Anastassiou, group planning and development manager at Logicom, told Channel Middle East: “Since the incident with the three resellers in Dubai, we have been paying more attention to the credit that we offer and adopted an all-round more careful approach when dealing with resellers in the region. We have also taken out an insurance contract with Atradius, as it is one of the biggest insurance providers operating in the region.”

The agreement with Atradius covers possible losses that may result from customer collections in all countries where the company is present. The annual premiums for the credit insurance are estimated to be between US$460,000 and US$ 530,000.

Channel Middle East revealed in August that Logicom faced bad debts from three resellers — believed to be Fortex-MID, Micron and MST — although Fortex-MID is since understood to have agreed a payment plan to return its outstanding debt to Logicom.

“We are receiving regular payments from one of the resellers that had amassed bad debt and we’re confident that this particular reseller will honour its debt.

However, we are taking legal action against the other two resellers from Dubai,” added Anastassiou.

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