A receiver has been appointed to Dublin-based sweet manufacturer Clara Candy by Banque Nationale de Paris (BNP). The firm's 105 employees were informed of the appointment on December 23rd as the company closed for the Christmas holiday. The staff were due to return to work on January 5th. It is understood that redundancy notices will be issued to most of them within the next few days because there are no funds to keep the plant open. Accountant Mr Billy O'Riordan of Coopers and Lybrand confirmed his appointment as receiver. Mr O'Riordan and his team are now assessing the exact liabilities and assets of the firm.

His objective is to sell the business, he said. It is understood that Clara owes between £1.5 million and £2 million to its bankers, BNP and Bank of Ireland. The business is understood to have built up losses since 1996, after a number of years of profitable trading.

Set up in 1986 by Mr Peter Cullen and Mr Ray McDonnell, Clara Candy operated at the lower end of the candy market, making jelly sweets.

The plant is in McKee Avenue in Finglas, Dublin. It has an annual turnover of about £12 million and about 90 per cent of the output is exported to the UK and Scandanavia.

Clara was a very successful and profitable in the late 1980s and early 1990s. Its problems started with a move into the British market, which was followed by a sharp and prolonged appreciation in the value of the pound in 1995/1996. This made its sweets expensive in sterling terms.

The problems were compounded by a significant investment in a distribution business in Britain at that time.

It is understood that the company was negotiating the sale of the business to a multinational operation. But when that sale collapsed, BNP moved to secure its loans and appointed the receiver on the basis of charges it holds on the business.

The receiver has today advertised the sale of the business, comprising a 43,000 sq ft premises in Finglas, modern plant and machinery and stock.

A spokesman for Forbairt said the agency was working closely with the receiver. "We are confident of that we can find a solution to the current problems," he said. Forbairt has £125,000 of preference shares in the company.

Industry sources said the lower end of the sweets market is very difficult and that it may be difficult to sell the business as a going concern and save the jobs.

The last balance sheet filed by Clara at the Companies Registration Office was for the year to end March 1995. It shows that Clara then had fixed assets of £3.4 million, net current assets of £0.87 million, and long term finance of £2.2 million. The company has paid up share capital of £132,252 - 2,233,780 issued shares of 5p each and 411,260 shares issued for "other than cash". Reserves were £1.9 million. At that time Clara owed £3.6 million to its short term creditors, while its debtors owed the company £2.7 million.

The last filing - in December 1995 - lists eight directors. Four of the directors had Irish addresses while three had US addresses and one had a British address. Attempts to contact the Irish directors yesterday were unsuccessful.