Donaghadee Carpets raises €10m

The management buyout (MBO) company that rescued a stricken Northern Irish carpet manufacturer late last year has raised more than €10 million from investors.

Donaghadee Carpets Ltd, which took over the Carpets International (CIL) plant in Donaghadee, Co Down, revealed yesterday it had received £7 million sterling (€10.13 million) backing for the venture, which will create 116 jobs.

CIL was closed with the loss of almost 300 jobs after its British-based parent went into receivership last year. However, Donaghadee Carpets agreed to buy the factory in December with the intention of re-starting manufacturing there.

Last night, Donaghadee managing director, Mr Joe Williams, told The Irish Times that state agency Invest Northern Ireland (Invest NI) had provided £2 million in grant aid and equity investment. Ulster Bank has agreed to provide loan financing. Enterprise Equity, supported by the Ireland Fund, led the equity fund raising for the new company.

Donaghadee will employ 60 to 75 workers over the next few months. Mr Williams said last night he expected this to increase to 116 by end of the year. The new company will focus strictly on high quality carpet manufacturing for independent retailers.

Mr Williams explained that CIL's approach, based on sales volumes, left the company with a lot of overheads. Donaghadee will outsource all non-core operations. "We are going to focus on making carpets," he said. "We will not have all the ancillary activities and overheads that the original company had."

Mr Williams said the new company was preparing to re-start manufacturing. Buyers have already placed orders with it.

CIL originally employed 289 people in Donaghadee and 144 in Killinchy, which is also in Co Down.