In a logical continuation to announcing its Board is investigating the actions of revolving credit facility lenders, Elcoteq SE (OMX: ELQAV) has filed an investigation in Finland on the conduct of revolving credit facility lenders. Elcoteq wants to establish wether the lenders have committed gross usury or other criminal acts against Elcoteq.
Elcoteq now claims it has been charged over 20 million Euros in excess fees and has lost ”several hundred millions” of damages as a result of the conduct of lenders, namely that according to Elcoteq the lenders ’practically withheld’ all of Elcoteq’s collateral as a security for the previously unsecured facility, which replaced an earlier facility from 2004. Elcoteq says that under normal times, it would not have agreed to such conditions. The argument on management's performance to allow such a state is left for the reader to judge.
Fittingly Elcoteq now wishes to tap Finnish legal authorities for the investigation after moving offices to Luxemburg few years ago. Obviously the company is still listed in Helsinki. The Chairman now admits that the existence of the company is severely endangered. The stock erased earlier losses for the day after the announcement.
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