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Last Updated:
Apr 24, 2009 - 5:31:05 PM |
Receiver appointed to Irish operations of Waterford Wedgwood; Glass making in Waterford dates from 1783; Czech immigrant Charles Bacik revived industry in 1947
By Finfacts Team
Jan 5, 2009 - 7:36:17 AM
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David Carson, a partner in Deloitte Ireland, has today been appointed Receiver of the Irish operations of Waterford Wedgwood plc and a number of its trading subsidiaries (the Companies). Partners in Deloitte LLP UK are also expected to be appointed as Administrators to Waterford Wedgwood UK plc and certain UK subsidiaries, details of which will be set out in an announcement to be released today. Glass making in Waterford dates from 1783 and in 1947, Czech immigrant Charles Bacik. A receiver is expected to be appointed to the UK operations, later Monday.
The Companies are involved in the manufacture, wholesale and retail of Waterford Crystal, Wedgwood fine china and Royal Doulton fine china products around the world. The Companies employ 800 staff in their Irish operations.
In recent years the Companies benefited from significant shareholder support as exhaustive efforts were made by the management team to restructure the businesses. However, as trading conditions deteriorated, it became apparent that a restructuring of the businesses could not be achieved in an acceptable timescale. Consequently, management began looking at the alternative strategy of trying to find a buyer for the businesses which would also have involved a comprehensive financial restructuring. While considerable progress was made, no firm offer was secured. The current global economic conditions have continued to affect the business to the point where the appointment of a Receiver was necessary.
Receiver, David Carson of the Irish firm of Deloitte commented: "I have today been appointed Receiver of the Companies and will be continuing to trade the business while seeking a sale as a going concern. My team will work closely with the management and employees together with customers and suppliers to ensure operations continue effectively and efficiently while a sale of the business is sought. Waterford, Wedgwood and Royal Doulton are classic brands which are steeped in history”.
Waterford Crystal announced a further 280 redundancies from its plant at Kilbarry on the outskirts of Waterford City, last October.
The job cuts left 70 manufacturing jobs at the Kilbarry plant, while 55 employees are employed in the Waterford Crystal tourist visitor’s centre at Kilbarry.
In November 2007, 490 job cuts were announced.
Last May , a request for a State guarantee on a €39m loan was rejected by the Irish Government, while the company had debts in excess of €470 million and a significant deficit in its pension fund.
Waterford Wedgwood, the parent company, claimed that Government assistance would be akin to the public bailouts of Northern Rock in Britain, Bear Stearns in the US and the rescue in the 1980s of Insurance Corporation of Ireland.
Waterford Crystal employed 3,200 people in Ireland, at its high point in the 1970's.
Glass making in Waterford dates from 1783 and in 1947, Czech immigrant Charles Bacik, grandfather of Irish Senator Ivana Bacik, opened a glass works in the city because of the reputation of the original glassware.
In the early 1950s, the operation was acquired by the Irish Glass Bottle company, which was controlled by the McGrath family who also operated the Irish Sweepstakes.
John Foley, chief of the Waterford Crystal unit, said in 2007 that the group employs 1,300 staff in Indonesia for the same wage costs as 90 staff in Britain, itself a cheaper labour market than Ireland.
Irish businessman Sir Anthony O'Reilly first invested in Waterford in 1990. As CEO Of Heinz in the 1980's, he often spoke about the need for Ireland to create world-class brands and said that Waterford Crystal, was the only Irish brand, which had achieved such a status.
Waterford Wedgwood plc announced this morning that it requested that its Stock Units be suspended from trading on the Irish Stock Exchange, with immediate effect, following the appointment of David Carson of Deloitte as Receiver to the Company and certain of its Irish subsidiaries and the expected appointment later today of Angus Martin, Neville Kahn, Nick Dargan and Dominic Wong of Deloitte LLP as Joint Administrators to Waterford Wedgwood UK plc and certain UK subsidiaries. Details of the affected companies will be set out in an announcement to be released today by the Receiver and Joint Administrators.
Waterford Wedgwood said the Board of Directors has for some time, and throughout the periods of forbearance last referred to in the company's announcement of December 22, 2008, it has been focused on the recapitalisation of the company, and more recently on active discussions regarding the possible investment in the company as a going concern. The company said the Board and executives have received remarkable support in this effort at the highest levels from the Irish and UK governments and certain Irish banks.
The firm said that notwithstanding the devastating effects of the global financial crisis, the Board was progressing this valuable effort. However, following the expiration and non-renewal of the forbearance period, certain Group companies have now been placed into receivership or will shortly be placed into administration. The continuance of the forbearance was essential to the Group continuing as a going concern.
David Sculley, Group Chief Executive Officer, Waterford Wedgwood plc, said: "I am disappointed that certain of the Group's UK and Irish subsidiaries have had to go into administration and receivership, but we remain optimistic that ongoing discussions will result in a buyer being found for the businesses."
Sir Anthony O'Reilly, non-executive Chairman of Waterford Wedgwood plc, said:"I want to commend the Board and the executives, the Irish and UK governments, our suppliers, our customers and our employees for all of their support and efforts. The Board has acted tirelessly in its efforts to resolve the Company's issues as a going concern. And the principal shareholders have invested in support of this business for almost 20 years. We are consoled only by the fact that everything that could have been done, by management and by the Board, to preserve the Group, was done."
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