Waterford Wedgwood sale to KPS Capital 'imminent'

The sale of Waterford Wedgwood to US firm, KPS Capital, is imminent, with sources suggesting last night that a deal could be done by the weekend.

The luxury crystal and china group’s banks placed it in receivership two months ago, and production at its Kilbarry, Waterford, HQ shut down several weeks later with the loss of 480 jobs.

Sources yesterday said that receiver David Carson of Deloitte, was finalising the terms of the sale of most of the group’s assets to US private equity player, KPS Capital, one of two bidders which emerged after the receiver moved in.

It is understood that KPS will buy most of the group’s assets, which include Waterford Crystal, Wedgwood and Royal Doulton china in Britain and Rosenthal porcelain in Germany.

The US company is committed to maintaining some employment in Waterford, although it is not known how many of the 708 jobs that were there before manufacturing halted will ultimately be saved.

The purchase by KPS also means that jobs will be saved in Staffordshire in England, where the group’s china manufacturing businesses are based.

Sources said yesterday that KPS was likely to get some Government support to further develop the visitors’ centre in Waterford, which is a major tourist attraction in the city and southeast region, and serves as a shop window for the crystal manufacturer’s products.

KPS is a New York-based private equity firm which uses a mixture of investors’ cash and borrowings to fund its purchases. It specialises in buying manufacturing businesses that are insolvent or facing financial difficulties, although the firm does not limit itself to investing in troubled companies.

Last week in the US it bought the New York state-based New Falls Brewery, and the producer of Labbatts beer, which federal competition law obliged owner Inbev Anheuser Busch to sell. Previously KPS has invested in industries such as motor parts manufacture, heavy engineering and paper milling. The company says it has a long track record of dealing with trade unions and organised labour.

Waterford was in the red to the tune of €330 million when its lenders, led by Bank of America, placed it in receivership in early January. The company had failed to meet a number of deadlines for bank loan repayments in the closing months of 2008.

During that time, the group was seeking new investors, and had spoken to KPS and its subsequent rival, Clarion Capital.

Businessman Sir Anthony O’Reilly and his brother-in-law, Peter Goulandris, invested €400 million in the group and own 52 per cent of it. In addition, they have guarranteed some of its borrowings.

Workers at the Waterford plant have carried on a sit-in protest since manufacturing was shut down there at the end of January.