The awful prospect of a portfolio of leased IBM mainframes and peripherals with reported gross value of UKP1,500m being unloaded onto a jittery market at distressed prices has suddenly become reality with the apparent demise of Atlantic Computers Plc. British & Commonwealth Holdings Plc yesterday placed Atlantic in the hands of adminstrators, Price Waterhouse, having decided that it is unable to provide further financial support. Atlantic was acquired in September 1988 for UKP416m, and British & Commonwealth has since contributed a further UKP117m in new and capital loans. However, several investigations have shown that profits and net assets were substantially overvalued, and it now seems likely that Atlantic has not returned any profit for two years. The Stock Exchange has suspended the British & Commonwealth’s shares – at 53 pence – until the company’s results are released when relisting will be sought. British & Commonwealth now expects its net assets to be substantially reduced, and is writing off its entire UKP550m investment in Atlantic. Mark Wood, recently appointed managing director of Atlantic Computers following the suspension of chief executive David McCormick, doesn’t rule out the possibility of legal action against Atlantic’s former accountants, Spicer Oppenheim. He says it is premature to talk of illegal activities at Atlantic, and the police are not involved at this stage.Details and background – see below.
