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Creditors freeze troubled Elcoteq's bank accounts

Finnish-owned contract electronics maker Elcoteq has filed a request for insolvency proceedings against itself after its creditors refused to let it roll over its debt and froze the company's bank accounts, daily Napi Gazdaság reports.

Elcoteq, whicht set up its Hungarian unit in 1998, once operated three plants in the country but today has only one in Pécs.

Currently about 2,800 employees work in Pécs, down sharply from 7,000 before the global economic crisis hit in 2008.  

Elcoteq invested HUF 13.5 billion in Hungary between 2003 and 2008.

Elcoteq earlier this month signed a conditional, non-binding term sheet with Platinum Equity, a Los Angeles, California-based private equity firm, with the aim of restructuring its debt and stabilizing the company's balance sheet by providing additional equity and debt funding.

The company had a net loss of €19.7 million (HUF 5.2 billion) in Q1 after a net profit of €40 million a year ago on net sales of €191.4 million, 13.2% less than in Q1 2010.