Electroniki Athinon S.A., one of Greece’s largest home appliances and electronics chain, announced on Wednesday that it has filed for bankruptcy after 66 years of operation.
The High Court of Athens with the number 267 / 13.04.2016 decision declared the company with the 45 stores bankrupt, and as of Wednesday all stores are closed. Electroniki Athinon attributes the bankruptcy to the failure to receive a bank loan for a restructuring plan after capital controls were imposed last summer.
In an official statement, the Electroniki Athinon said that, “Despite the company’s continuous efforts, the state of the economy, further weakening of the purchasing power of consumers, capital controls, among other things, made foreign suppliers suspicious of Greek companies, and in conjunction with banks refusing to give loans, it was impossible to continue the operation of the company. The business plan, which was co-decided by the banks, suppliers and shareholders in April 2015, had created reasonable prospects for the recovery of the company. The events, from June 2015 onwards, undermined and then canceled practically any plan. The result was a tight liquidity problem, lost market share and increase of losses. Therefore, Electroniki, having exhausted all possible options, was led to today’s painful decision.”
According to the company, there are no wages owed to the approximately 450 employees, and it is estimated that they will be able to receive their compensation pays in about eight months. A reconciliation meeting between employer and employees at the ministry of labor at the request of the Federation of Greek Private Sector Employees that was scheduled for Thursday, has been cancelled.
Electroniki Athinon has outstanding debts to banks, suppliers, and landlords of the stores. After declaring the company bankrupt, the court will appoint an insolvency administrator and then the liquidation of company assets will commence. The company assets includes 4-5 real estate properties. Legal experts in bankruptcy issues estimate that the will last about eight years.
The company operated in its current form since 1989, when it was acquired by current owner Yannis Stroutsis. However, its story began in 1950, when it began operations as an electrical appliance store. In 1999 the company was listed on the Athens Stock Exchange, but as of October 1, 2012 had suspended share trading.