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Saturday 23 August 2014

Kenny faces fury in home town over Elverys jobs

Fine Gael party warns Taoiseach Nama has put hundreds of jobs at risk with its 'shenanigans'

RONALD QUINLAN and JOHN DRENNAN

Published 16/03/2014 | 02:30

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An Taoiseach Enda Kenny. Photo: David Conachy.
An Taoiseach Enda Kenny. Photo: David Conachy.

TAOISEACH Enda Kenny is facing a furious revolt from within his own constituency and party over his alleged failure to protect hundreds of jobs at Elverys Sports in the wake of the controversial decision by Nama to put the iconic company into examinership.

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Elverys, which employs nearly 200 people in Mayo and a further 450 across the country, was set to be offloaded by the State's 'bad bank' for €10m in a management buyout (MBO) on January 31 last. However, the deal fell through at the last minute.

Reports at the time suggested that Nama pulled back from the MBO, fearing that it would face a legal challenge from rival bidders Lifestyle Sports, owned by the Stafford Group, or Sports Direct, owned by UK billionaire Mike Ashley, who also owns Newcastle United Football Club.

Comments made by Jobs Minister Richard Bruton in the Dail last Tuesday have, however, revealed more information.

Addressing the matter in the course of a debate on jobs protection, Mr Bruton told the Dail that the deal between Nama and Elverys' management "could not proceed at the agreed time because the management team did not have the requisite funding in place".

However, the Sunday Independent has since received claims from several sources that Nama got formal written notification on the day in question from AIB, informing them the money to complete the deal was in place and ready for transfer that afternoon to the agency's solicitors in the matter, William Fry.

When asked to explain how the Jobs Minister had come to provide information to the Dail which conflicted with these claims, a spokesman for Nama provided a statement to this newspaper at 11:42am yesterday saying: "The proposed receivership appointment required to give effect to this transaction could not proceed because the proposed receiver advised he would be legally obliged to consider an alternative, higher bid that had been made in writing to him.

"The MBO transaction was to have been completed prior to the emergence of this new bid but could not because the MBO team was unable to draw down the necessary funding as they did not fulfil all the bank's preconditions. There is an onus on any purchaser of any asset to ensure that they are in a position to draw down their funding from their bank to complete the transaction."

Just two hours after Nama provided its response, the Sunday Independent received an unsolicited statement supporting its version of events from the board of Elverys' parent company saying: "Whilst the funds were in place and available for draw down, some final details of the deal required further attention before the contract could be completed and the funds transferred."

Notwithstanding Nama's defence and its efforts to protect Elverys' future through the appointment of an examiner (a move which received the support of the company's own directors), the agency is coming in for growing criticism from within Mr Kenny's Mayo constituency, with Fine Gael TD Michelle Mulherin leading the charge.

Commenting in the Dail on the manner in which the attempted MBO of Elverys Sports had fallen through, Ms Mulherin said: "As a result of Nama's shenanigans in handling the sale of the business, this profitable company has gone into examinership.

"Is this how Nama, the largest property company in the world, should be doing its business on behalf of the taxpayers of this country?"

Fine Gael Minister of State Michael Ring made it clear that he still wanted the MBO of Elverys to succeed.

He said: "I have been told by Nama that legally they are obliged to get the best price but the national interest should be factored into these decisions. . . Elverys is a distinctively Irish firm; they even sponsor the Mayo football team."

Fine Gael Cathaoirelach of the Seanad Paddy Burke was also clear in his support for Elverys' management, saying: "This is a great, home-grown Mayo company. As a local senator and Castlebar man, I fully support the Elverys workers and the management and hope that a proper resolution in this matter is brought forward in the coming weeks."

Fianna Fail spokesman on jobs and Mayo TD Dara Calleary said: "Elverys are a classic case study in what Morgan Kelly was talking about when it comes to Irish SMEs. This I understand is a solid Irish firm that has been encumbered with property debts. This is a real test of Nama and the Government's capacity to put people and jobs before property.

Quite apart from the escalating fallout within his own party, the Taoiseach is fielding criticism from his constituents, with some now comparing his record unfavourably with that of former Fianna Fail minister Padraig 'Pee' Flynn.

One local source remarked: "Flynn gave us the roads, we need jobs and Enda can't even save a company with 170 jobs in his own town. He's fierce fond of putting on the Mayo jersey when it suits him; the next time he does he should have a look at the front and see it's Elverys sponsoring it."

When asked for comment on the threat hanging over the jobs of Elverys Sports workers, a spokesman for the Taoiseach told the Sunday Independent: "The Taoiseach and the Government are very concerned about any threat to jobs and want to see this situation resolved for the Elverys workers. However, the company is in an examinership process and therefore it would not be appropriate to comment further."

A spokesman for Elverys management said: "The board acknowledges the support of Nama in the current examinership process and the board has every confidence that the current process will deliver best results for all the stakeholders."

Sunday Independent

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