Small firms lose out in Celtic rescue deal
dozens of small business which are owed €1.5 million by Wexford's Celtic Linen will receive just five per cent of the outstanding debt, under the terms of a court-approved rescue plan for the company.
At the same time the Department of Social Protection is to receive just 10 per cent of the €1.4m that Celtic Linen owes it.
A scheme of arrangement drawn up by the examiner to the company, Tom Kavanagh of Deloitte, shows the department is a preferential creditor but will face a €1.26m shortfall on its debt. The Revenue Commissioners is owed more than €971,000 by Celtic Linen, but will be paid €155,815 under the scheme.
Chief executive of Celtic Linen Donald Campbell said that throughout the Examinership process, suppliers (both local and further afield) provided highly appreciated support to ensure that customer deliveries continued as normal whilst new investment was sought to secure the future of the 380 jobs associated with a large local employer. 'Thankfully Celtic Linen has long standing relationships with many loyal suppliers and, with new investment is now in a position to develop these relationships in to the future - a situation that would not have been possible had the Examinership process, however unpalatable, been unsuccessful,' he told this newspaper.
The company, which employs 380 people, was taken over by investors David Raethorne and Matt Scaife of Causeway Capital, who are putting up a €1.4m loan to pay a partial dividend to creditors and keep trading. AIB, the firm's only secured creditor, is owed €5m as well as €1.2m under an invoice discounting arrangement, and a further €610,000 on leasing finance. The bank will get a €141,000 dividend from the examinership and be repaid €592,000 it advanced to finance the company during the examinership period.