High-end wheel and parts maker EDCO has been declared bankrupt following the withdrawal of a key investor.
A withdrawal from the company at the tail end of 2016 by Joseph Hsu, a 44% shareholder with links within Best Top Industrial was the catalyst for the brand’s demise. Suppliers linked with Hsu (FTC and Shenlong) halted deliveries to EDCO in March of 2016, compounding pressures.
CEO Rob Van Hoek is said to be unhappy about the chain of events, telling European trade news portal Bike-eu: “In 2015 and 2016 we have grown substantially in sales, especially in exports. In order to expand on this growth we needed an additional investor end of 2015. Full Tech Composites already supplied us with rims and Joseph Hsu wanted to act as extra investor. So he became a shareholder. One year later, end 2016, he suddenly insisted on selling his shares.”
Van Hoek further outlined that EDCO was unhappy with the lead times and quality of rims sourced from FTC and Shenlong. CI.N has since learned that this lead to non-payment, allegedly on the back of testing failure issues.
Rob van Hoek purchased the Swiss cycling components company in 2007.
The withdrawal from EDCO reportedly saw FTC call for its investment to be repaid in one go, something that was unachievable by EDCO’s other shareholders.
With the bankruptcy official, one of Joseph Hsu’s businesses has now apparently purchased all EDCO Engineering assets, including the trademark, a move that has left other investors empty handed.
“It’s business as usual,” however, UK distributor Cambrian told CI.N. “Dealers needn’t worry, we’ll soon have stock of a new range with new hubs and rims. Paul Lew will be on hand at Eurobike to talk through the changes.”