COUNTYGLEN, which has until October 25th to find a business would allow it maintain its market listing, is understood to be close to acquiring a engineering company for £1.2 million.
CountyGlen's chief executive, Mr Niall Duggan, would make no comment, but informed sources have indicated that CountyGlen is in discussions on acquiring Thomas Storey, a company in the north of England which manufactures shipping containers and mechanical shovels for diggers and other construction equipment. Mr Duggan would only say that CountyGlen was talking to "a number of companies".
It is understood, however, that the Thomas Storey acquisition is at an advanced stage and, if completed, would provide CountyGlen with the type of business that would persuade the Stock Exchange to lift the suspension on CountyGlen shares and allow trading to resume.
CountyGlen shares have been suspended for the best part of four years and the company has been given until October 25th to demonstrate that it has a suitable business for a listing.
Last April, when giving the company its October 25th deadline, the Stock Exchange said that CountyGlen would have to publish listing particulars which demonstrated its compliance with all listing requirements, including the appointment of a sponsoring stockbroker. Informed sources have told The Irish Times that CountyGlen favours MMI as a sponsoring stockbroker.
It is understood that within the Thomas Storey business the division that manufactures equipment for diggers is profitable, while the container business is currently running at a loss. It is thought likely that, if and when the acquisition is completed, CountyGlen would try and sell the loss making parts of the Storey business, as well as its remaining property interests.
This would leave the profitable end of the Storey business as the mainstay of a relisted CountyGlen, with the company also having in the order of £1 million in cash when the various disposals were completed.
Funding an acquisition like, Thomas Storey will not be a problem for CountyGlen which has £1.2 million at its disposal following the settlement in April of actions the company had taken against Anglo Irish Bank, solicitors Connolly Sellors Geraghty Fitt and members of the Carway family. The Carways did not make any contribution to that £1.2 million settlement.
That litigation arose from the report into CountyGlen by Mr Frank Clarke SC, who concluded that Mr John Carway was behind a fraud that cost the company £1 million. That conclusion was vehemently rejected by Mr Carway, who said he planned to continue with legal actions against Mr Clarke and against the Minister for Enterprise and Employment.
After the settlement, CountyGlen had to cover its own legal fees - estimated at £500,000, although the company was due £400,000 from the sale of property in Blackrock, Co Dublin, contingent on the purchaser getting planning permission.
Following that settlement, CountyGlen's chairman, Mr Ambrose Kelly, said the company's focus would be to identify "a suitable business with a view to restoring shareholder value".
If CountyGlen was successful in its search for an acquisition and had its share relisted by the Stock Exchange, it would come as some consolation to the company's shareholders who have had no market for their shares and have been locked into the company since October 20th, 1992.
CountyGlen shares were suspended at 70p, but are unlikely to trade at anything remotely like that price if they are relisted.
