Second US equity fund set to bid for Waterford Wedgwood

A SECOND US investor is lining up a bid for troubled Waterford Wedgwood and intends meeting trade union and Government representatives this week.

New York-based private equity fund, Clarion Capital, looks set to bid against another US player, KPS, which is already in talks with receiver, David Carson of Deloitte, to buy the group, whose banks took it over this month after it failed to meet debt repayments.

The news comes as it emerged that the receiver has ended phased redundancy payments due to over 200 former workers who were laid off from its Waterford operation last year.

The 206 former staff had been receiving redundancy payments phased over a period of time. Mr Carson cut these by 60 per cent when he took over at the beginning of January.

He has since been forced to cut the payments entirely. The former workers in question received their final phased payments last week. They were part of an overall group of 490 staff laid off in a cost-cutting programme begun in November 2007.

The jobs in question were moved to countries where labour and manufacturing costs are lower than in Ireland.

The 800 staff at Waterford have been on a three-day week since January 19th. The ending of the redundancy payments and the shortened working week are being seen as a clear indication that the cash available to Mr Carson to keep the company going is limited.

He has said that he is committed to maintaining and selling the business as a going concern. However, he has told trade union representatives that if neither of the two bids goes ahead, it will not be “economically viable” to keep Waterford going in receivership.

He has not commented on Clarion’s proposed bid. When KPS formally revealed its interest in bidding for Waterford Wedgwood, the receiver said at the time that he would continue to talk to other potential buyers.

Unite, the trade union which represents most of the workers at the company’s Waterford manufacturing base, yesterday issued a statement saying that it was set to meet Clarion today.

The statement said that if the investment fund’s proposals are successful, they could keep manufacturing in Waterford. The union’s regional secretary, Jimmy Kelly, said that it was cautiously optimistic.

“We do not underestimate the challenges ahead if we are to secure an agreement which protects the interests of all our members,” he said.

Clarion owns a diverse range of businesses that includes manufacturing, financial services and a restaurant chain. It also owns US luxury luggage manufacturer, Hartmanns.

Its past investments include the Imax cinema group and Snapple drinks, which are both familiar to Irish consumers.

Meanwhile, Waterford Wedgwood announced yesterday that Ali Wambold and Jonathan Kagan have resigned from the group’s board. Their departures follow those of many directors, including Sir Anthony O’Reilly and his brother-in-law, Peter Goulandris, who have invested €400 million in the group.