A 90-YEAR-OLD Wexford linen company which employs almost 400 people has exited the examinership process after finding a new investor.
Towards the end of September Celtic Linen was forced to seek protection from its creditors through examinership after racking up losses in recent years. The business was set up in 1926 and employs 380 people in Drinagh, county Wexford.
However Tom Kavanagh of Deloitte Ireland, who had been appointed as the company’s examiner, has since announced that Celtic Linen has found a new backer.
Kavanagh said that Causeway Capital has entered into an agreement to invest in the company, which he said “facilitated its successful exit from examinership”.
Causeway Capital is a small business private equity investor which is backed by Ireland’s sovereign wealth pool, the Ireland Strategic Investment Fund.
The investment by Causeway Capital was conditional on the approval of a court-sanctioned ‘scheme of arrangement’ proposed by the examiner.
Kavanagh said that AIB, Celtic Linen’s largest creditor, has confirmed to him that it intends to vote in favour of the scheme.
Scheme approved
The move will also see Causeway Capital provide a “material investment” in Celtic Linen.
A spokesman said that the funds will be used by Celtic Linen to invest in equipment, “high-quality linen and staff facilities to enhance service levels for customers and help the business return to growth”.
A spokesman for Celtic Linen confirmed that the scheme was approved yesterday and also confirmed that there are no plans for redundancies.
Celtic Linen CEO Donald Campbell said that the company is “delighted to have secured investment from Causeway Capital and looks forward to working with them”. He said that their investment has protected a “significant” number of jobs in Wexford.
“On behalf of the company, I want to thank our customers, employees and suppliers for their continuing support over many years, but particularly during this recent period of examinership,” he said.
“We look forward to continuing to work closely with them as we move forward.”
Investment
Causeway Capital co-founder Matt Scaife said that the company is “delighted” to provide the funds needed for Celtic Linen to exit the examinership process “as well as additional investment in its facility in Wexford”.
“We look forward to working with the management team to help the business return to growth,” he said.
The High Court heard in September that Celtic Linen would need to upgrade its equipment as its machinery was old and prone to breaking down. The business had lost nearly €500,000 in the year to February 2015, according to its latest accounts.
Celtic Linen also faced difficulties due a high cost base and the fact that it had lost customers to new entrants into the market.
Written by Paul O’Donoghue and posted on Fora.ie
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