Osmosis pledges to repay debts
More than 100 staff to go as company reshapes to fend off troubles
Software and components distributor Osmosis has confirmed it is in dire financial straits and is junking unprofitable operations back in an attempt to stop the collapse of the entire group. The company held a press conference in London yesterday and issued a press release which carried the heading Osmosis wants to honour all creditors. This brave move is an attempt by Osmosis to distance itself from the stereotype of a company that runs away from its bad debts. John Fenton, Osmosis MD, said the company had been hit by a number of bad debts, some of which relate to the collapse of Roldec and Memsolve. He said Osmosis is suing the company it had outsourced its despatch functions to. "They made a lot of mistakes in August, September and October," he said. "That meant a lot of customers wouldn't pay up, in some cases we couldn't even prove if goods had been delivered." "The whole thing, combined, was a real problem. We came very close to the wire. So we decided to concentrate on the more profitable, less difficult parts of the group." The Osmosis Group will no longer sell PC components and is pulling the plugs on its own non-brand PC manufacturing operation. It will continue to operate as a Microsoft OEM, and despite having none of its on PCs to install the software on, will aim to sell it on the open market. Osmosis also operates a grey market operation, Tradelink, which buys components from overseas markets. This was described as being the Osmosis cash cow and will continue to run, alongside PPIS, the group's Internet-for-SMEs company. Fenton said the actions of some company directors when their businesses hit trouble left him "quite frankly disgusted" and said he was at pains to act differently. "I have my own code of ethics and that's important to me. I didn't go into business just to go out of business," he said. Fenton pledged to chasing up all Osmosis unpaid debts and seeing that all his creditors are paid in full. He said he had received positive reactions from all the Osmosis creditors he had spoken to so far. From a high-spot of £199 million turnover last year and a headcount of around 125 staff, the company will shrink back to retain only 19 employees and will have an estimated turnover of between £50-100 million. Osmosis' Irish operation is to be sold off to its management later this year.®
Sponsored: RAID: End of an era?