Escom Files for Bankruptcy

July 15, 1996 (CUCUG) - According to the Associated Press, Escom announced today that it would indeed file for actual bankruptcy rather than the restructuring reported earlier. Other press accounts have quoted internal sources at Escom which stated that the picture did not look as if they could actually pull off a court-supervised debt restructuring and would probably be forced into actual bankruptcy.

Today, a German, court-appointed administrator aggreed with that assesment, deciding that Escom had little capital to even make it through talks with its creditors.

The AP reported that this does not mean the end of Escom and that they could still shake off their current woes with a new influx of investor capital. However, as we reported earlier, Escom has already tried that in weeks past with little success.

Escom's troubles began last year when new competition from off-shore producers like Acer lowered prices and demand for PCs in Europe weakened, bloating inventories and draining much-needed cash.

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