January 5, 2009
Waterford Wedgwood collapses over debt pile
Up to 1,900 UK jobs were under threat today after Waterford Wedgwood, the 250-year-old fine china and glassware maker, collapsed into receivership.
The company, whose brands include Royal Doulton, announced this morning that the Irish-listed company had been placed into receivership and that the bulk of its 10 UK subsidiaries would go into administration later today.
The collapse leaves Sir Anthony O’Reilly, the media tycoon and the company’s non-executive chairman, facing millions of pounds worth of losses.
Waterford Wedgwood has been forced to appoint a receiver, which it named as David Carson from Deloitte, the accountancy firm, after it missed a January 2 deadline to meet loan repayments.
The company, which has net debts of €449 million, had been unable to raise €150 million of new equity it had sought in August.
It will also appoint administrators to the UK business later today, including Neville Kahn, the Deloitte partner charged with finding a buyer for Woolworths, which will see its remaining 200 stores close tomorrow after nearly 100 years of trading.
Waterford Wedgwood employs 1,900 people in the UK, chiefly at its manufacturing operation at Barlaston, Stoke-on-Trent, at retail stores and other offices as well as 800 staff in Ireland.
The possible closure of one of Ireland’s most well-known brands would be a major blow for the country that was one of the first in the European Union to officially fall into recession.
A spokesman said that a further 5,000 staff around the world at subsidiaries in Germany, the US, Canada, Australia and at a manufacturing plant Indonesia were not directly affected by today’s announcement.
David Sculley, chief executive at Waterford Wedgwood, said he was “disappointed” but insisted he remained optimistic that ongoing discussions would result in a buyer being found for the businesses. However, a spokesman said that even if a buyer is found there is no guarantee that all jobs will be saved.
Sir Anthony, who is also grappling with €1.4 billion of debts at Independent News & Media, his media group, said today: “We are consoled only by the fact that everything that could have been done, by management and by the board, to preserve the group, was done.”
Unless a buyer can be found for the business Sir Anthony and his brother-in-law, Peter Goulandris, are facing big losses after bailing out Waterford Wedgwood, leaving them with a combined stake of nearly 60 per cent.
Waterford Wedgwood has been in talks with a US private equity fund about a possible €600 million rescue deal.
The company had posted nearly six years of operating losses and had struggled to raise fresh cash during last year’s credit squeeze. The January 2 deadline represented the third postponement by its lenders.
The group posted a widening loss of €63 million during the six months to October 4, 2008 – the latest period for which figures are available.
As well as its own-brand products, the company also produces goods for a range of designers and celebrities including Versace, Terence Conran, his son, Jasper Conran, Gordon Ramsay and the Andy Warhol Foundation.