Five-way talks raise hopes of breakthrough at Waterford

HOPES OF a breakthrough at Waterford Wedgwood were raised yesterday as five-way talks got under way between the group’s receiver, its workers, two bidders and the Government.

The crystal and china manufacturer’s banks placed it in receivership a month ago after it failed to make loan repayments on time.

Last week, receiver David Carson of Deloitte was forced to shut down manufacturing at its Irish facility in Waterford after he ran out of cash with the loss of 480 jobs. The move sparked a sit-in protest at the plant which was continuing last night.

It is understood that yesterday the two US firms, KPS Capital and Clarion Capital, representatives of the union Unite, and the Government were holding talks with Mr Carson and each other.

The talks prompted speculation that a deal on the sale of the group to either KPS or Clarion is imminent, or that operations could resume at the Kilbarry, Waterford, facility shortly.

The two bidders have met both the unions and Government to outline their proposals for the business, and they have held discussions with Mr Carson, who is seeking a buyer for the group.

Clarion was at the Waterford site this week, carrying out due diligence – a formal evaluation of the company and its assets – as part of the bid process.

Yesterday was the first time that the bidders, union and Government have held simultaneous talks.

KPS and Clarion are bidding for the entire group, which includes Waterford Crystal in Ireland, Wedgwood and Royal Doulton china manufacturers in Britain and Rosenthal Porcelain in Germany.

Clarion’s bid also involves former Waterford Crystal chief executive John Foley. He stepped down from the role last month in the week after Mr Carson was appointed and KPS announced its interest.

Clarion has a track record of working with and investing in manufacturers of high-end consumer goods. KPS specialises in investing in manufacturers which are insolvent or carrying heavy debt burdens.

Some reports have suggested that local politicians and the trade union favour the Clarion bid as they believe it has the greater commitment of the two to keeping manufacturing in Waterford.

However, KPS is understood to be prepared to take a one-year option on the Irish plant, and is likely to maintain about 300 jobs.

Clarion will employ roughly the same number of people, according to some reports. Both bidders are interested in the group’s intellectual property, including its brands, trade marks, patents and manufacturing processes.

Waterford Wedgwood’s liabilities exceeded its assets by over €330 million when the banks appointed Mr Carson in early January. Its former executive chairman, Sir Anthony O’Reilly, and his brother-in-law, Peter Goulandris, own 52 per cent of the group. They invested €400 million in the business. Both men resigned from the board after Mr Carson was appointed.

EU seeks clarity on Waterford employees’ pension protection; page 7