Enterprise Ireland defends its €30m O'Callaghan investment
GOVERNMENT body Enterprise Ireland last night defended its decision to pump €30m of taxpayers' money into Barry O'Callaghan's debt-laden education media company back in 2008.
Shareholders in Education Media and Publishing Group (EMPG) face a virtual destruction of their investment after creditors behind €6.6bn of its debt moved to take control of the company earlier this week.
Enterprise Ireland, which is not a shareholder in the firm, committed the cash to EMPG in September of 2008 in a bid to lure the firm's research and development (R&D) facility here where 200 people are currently employed.
The investment body broke its €650,000 investment limit when it backed the R&D project, its biggest ever funding to date which had been given government approval.
The investment is being drawn down in the form of R&D and employment grants.
A spokesperson for Enterprise Ireland said the body had been assured of the future of the Irish operations. He said: "We have received assurances from the company. The project is on schedule. We don't waste taxpayers' money."
Other shareholders in the firm, formerly known as Riverdeep, are private clients of Davy Stockbrokers including former Anglo Irish Bank chairman Sean FitzPatrick and financier Domhnall Slattery who built up a stake of 15pc in the firm.
At the end of last year, Davy wrote down the value of its clients' shares from $10 apiece to $1, it is understood.
Mr O'Callaghan formed EMPG through the $5bn (€3.4bn) merger of his e-learning firm Riverdeep in 2006 with US text-book group Houghton Mifflin and their subsequent $4bn acquisition of Harcourt Education in the US from Reed Elsevier.
Mr O'Callaghan yesterday said the company, which employs 6,000 people worldwide, is undergoing a financial restructuring to deal with multi-billion euro debts.