Ulster Bank spurns €1m bid to save 160 Olhausen jobs
Receivers deny knowledge of offer after bank turns down move for sausage-maker from British turnaround specialist
ULSTER Bank turned down a €1m rescue offer for sausage-maker Olhausen a day before the business was shut down with all the jobs lost, the Irish Independent has learned.
Receivers said last night that they had not been aware of the offer before they took the decision to shut Olhausen with the loss of 160 jobs.
The offer, from turnaround specialist Michael Flacks, was rejected by Ulster Bank, which opted to appoint receivers to take control of the business late on Tuesday.
News of the potential rescue, which might have saved the company and jobs in Dublin and Monaghan, is certain to provoke an outcry, not least among the devastated workers and suppliers who will suffer as a result of the closure.
Mr Flacks told this newspaper that he had offered to take control of Olhausen with a €1m offer to buy €8m in loans held by Ulster Bank. He said he was stunned when he heard that Olhausen has ceased trading.
"I don't understand why they let a good business die," he said.
Mr Flacks said he would have invested a further €2.5m into the business, had he gained control of Olhausen. The company's products and heritage made it a perfect fit for expansion into the US market as a specialist brand.
The pork producer was a "gem in the making" he said.
Born in Britain, Mr Flacks specialises in buying companies that are in financial difficulties. He bought the fashion chain A Wear earlier this year and was among the bidders circling the Clerys Department store before it was sold to a US investor last month.
He was just one of a number of potential bidder circling Olhausen, which was known to be on the market for some time, he said.
Ulster Bank last night declined to comment on the news.
Its understood that the bank took the decision to appoint receivers at the urging of the directors of Olhausen -- not because it was calling in its loans.
The directors made the request early on Tuesday, before the offer from Mr Flacks was put to the bank.
It is believed that the bank briefly considered the offer but then opted to move ahead with the receivership. The decision to close Olhausen was taken by the receivers from accountants BDO.
Receiver David O'Connor of BDO said he was not aware of the takeover bid when the decision to close Olhausen was taken early yesterday. He said: "We are not aware of any offer being made for the business prior to our appointment, no offer has been received since our appointment."
Mr O'Connor and Jim Hamilton, both of BDO, were appointed receivers by the bank late on Tuesday. They took the decision to shut the business within hours of their appointment, because Olhausen had simply run out of money, he said.
He explained: "The reason we decided not to trade was because there were insufficient funds to allow us to do so."
Companies are not allowed to continue in business if they don't have cash available to cover their running costs. However, it is not clear whether the receivers might have sought a short-term loan to keep the doors open if they had been aware of the investor's offer.
Mr Flacks bought A Wear in February from receiver Jim Luby of McStay Luby, just a day after that receivership appointment, in a technique known as a "pre-pack" receivership deal.
Unlike Olhausen, however, A Wear never closed its doors. It was bought as a going concern in a deal that secured 460 jobs at its 32 stores in the Republic.
Last night Mr Flacks said he had hired accountants Blake Hughes to assess the potential of buying some Olhausen assets from the receivers, but at a much lower price than previously offered.