WATERFORD Wedgwood is set to make its first direct investment in a European china manufacturer with a 9 per cent investment in the German group Rosenthal. A statement from Waterford is expected today.
A spokesman for Waterford would make no comment, but last night Rosenthal said that after a lengthy search for a strategic partner, it had decided on the Irish company.
No details on the cost of Waterford's investment were available last night, but at its current share price of DM108.50, Rosenthal has a market capitalisation of DM65.5 million (£25.2 million).
This suggests that Waterford will pay between £2 million and £3 million for its 9 per cent stake, although industry sources believe that the Irish group will increase its stake in Rosenthal at some stage in the future. Rosenthal will seek shareholder approval for the proposal to raise its issued share capital by 10 per cent on January 31st.
While small in terms of the money involved, this will be seen as a significant move by Waterford, as the group's previous investments in Europe have simply involved sourcing crystal from German, Czech and Slovenian producers for its Marquis range. Last year, Waterford paid £4 million for the small British crystal producer Stuart Crystal.
Rosenthal had sales last year of £134 million - about two-thirds the sales of Waterford's own Wedgwood china business. But in contrast to Wedgwood which turned in operating profits of £17.8 million, Rosenthal had an operating loss of £7.1 million in the same period. Rosenthal also has long-term debt of £6.7 million and other long-term liabilities of over £20 million.
