PC World owner’s £80m of debt to pay suppliers not covered
The government's trade credit insurance scheme, announced in last week's Budget and run by the Lord Mandelson’s Department for Business and Regulatory Reform (BERR) starts today and run to 31 December.
Suppliers will be able to purchase government-backed insurance to either restore cover to the original level or double the amount they are able to obtain from the private sector up to the value of £1m.
It is open to companies from all sectors and from all stages of the UK supply chain that have suffered from a reduction in cover from 1 April 2009.
Business Secretary Lord Mandelson said: "The Government's Trade Credit Insurance top-up scheme provides a lifeline for businesses to help them address the specific challenges that they are facing as a result of the reduction in trade credit insurance.
"This scheme is a targeted transitional measure to help companies secure the cash flow they need and restore confidence throughout supply chains. Risk is shared between Government and the private sector striking the right balance between supporting businesses and protecting taxpayers' money."
The news came as DSG International, owner of Currys, Dixons and PC World announced its debt has soared because it had been forced to borrow money to pay suppliers early after credit insurance was withdrawn. The Times said as much as £80m of its debt was caused by the credit insurance withdrawal.
Because DSG’s cover was withdrawn before today its suppliers are not covered by the BERR scheme.