A SURVIVAL plan for the food processors, Borodale Foods Ltd should enhance the company and lead to an increase in staff numbers at the factory in Tuam, Co Galway, from 12 to 30, a High Court judge said yesterday.
In approving the examiner's scheme of arrangement, Mr Justice Kelly said the scheme was a good one and ought to have the effect of not only ensuring the company's survival, but of also enhancing it.
Mr Paul Mackay was appointed examiner to Borodale Foods, with a registered address at Lower Baggot Street, Dublin, on March 14th. In the scheme of arrangement, he said the company directors had presented the petition for the appointment of an examiner Alter his appointment, he reported the company could survive as a going concern.
The proposed new investors had the necessary expertise and knowledge of the markets, he said. It was their plan to expand the sales turnover to £2 million within three years.
This target would be achieved through three avenues. They would transfer production for the Irish market from Norfolk, England, to Tuam, which would generate an immediate home market turnover of £300,000, with growth expected to bring this to £500,000 within three years.
On completing the new packing line, production of the smaller bag packs would be transferred from Norfolk to Tuam. This would increase turnover by about £1 million in a full year and this production would commence within 18 months of acquisition. Production for the European market would be carried out in Tuam as soon as the facility upgrades were completed. Exports were expected to grow significantly from the current turnover level of £400,000 in the coming years.
By expanding the company's turnover and upgrading the pro duct ion facility at Tuam, it was expected that factory staff will increase from 12 to 30 within three years.
It was the new investors' intention to develop sources of raw material adjacent to the Tuam plant, which would have the effect of increasing employment within the immediate locality.
It was also intended, in three phases, to further develop and expand the production facility at Tuam to upgrade the plant to firstclass standard at a total anticipated cost of £100,000 within six months They also planned a capacity expansion costing £150,000 over 12 months and the construction of storage facilities at a cost of £100,000 within six months.
Under the scheme, the new investors would own 100 per cent of the company and were committed to investing approximately £350,000 immediately and a further £350,000 to £400,000 over a three year period.
In one of the amendments to the scheme, Mr Justice Kelly said the £400,000 debt of the secured creditor, Ulster Bank, would be written down to £325,000 to be repaid in monthly instalments.
In approving the scheme, he said the existing shareholders would be bought out for £1 each.
In the statement of affairs presented to the court on March 14th, it was estimated the company's total deficit was £471,000.