NTS Ireland, the Shannon-based subsidiary of the Canadian manufacturer of notebook computers for schools, will continue trading while a purchaser for the plant is sought, its general manager, Mr Ray Kenny, said yesterday.

The loss-making parent company, which is quoted on the Toronto Stock Exchange, has announced it is divesting itself of the subsidiary as part of a costcutting restructuring plan.

Mr Kenny said the Shannon plant, which employs 58 people manufacturing the DreamWriter laptop, would continue to support its British customers while options were explored.

While a closure was a possibility, he said there were parties interested in purchasing the plant, which has been in Shannon since 1997. "I am not giving protective notice or redundancy until I believe it is in the best interests of the company to do so," Mr Kenny said.

He added that the main reason for the sale or closure was the Canadian $7 million loss in the 1999 accounts.

The parent company stated that its financial position had caused it to be in breach of covenants with its bank, HSBC Bank Canada, and convertible debenture holder.

The bank has demanded payment of a $8.7 million debt. "In future, the company intends to sub-contract all manufacturing, which is, in turn, anticipated to significantly improve the company's financial performance," NTS Computer Systems stated.

Mr Kenny said he was working closely with Shannon Development and negotiating with bankers "both in Canada and in Ireland". "There are no guarantees for the future. However, we are trying to market our ability as a workforce to market products," he said.

The company went through a rapid expansion over the past five years and achieved seventh place in Deloitte & Touche's "Canadian Technology Fast 50" 1999 annual ranking with a five-year growth rate of 2,959 per cent. At one time, the Irish plant had a maximum of 147 employees but last month, 33 indirect employees had their contracts terminated.