EFFORTS to rescue Bell Lines collapsed dramatically yesterday, as a plan involving new investment fell through. The company is now facing liquidation and the loss of 600 jobs, while Waterford Port will lose its main income stream.
There is also expected to be widespread disruption of Bell freight already in transit around Europe, as hauliers and freight carriers await developments.
The examiner, Mr David Hughes of accountants Ernst & Young, will apply to the High Court this morning to have the examinership lifted. It is expected that immediately afterwards the company will apply to the court for a liquidator to be appointed.
The company has debts of over Pounds 25 million and around Pounds 17 million of this is owed to hauliers. It is expected that a number of hauliers may go out of business as a result of the collapse.
None of the parties concerned was willing to comment last night. The deal collapsed just a day after the examiner was granted a further extension of time by the High Court to put a rescue package together.
It is understood that lmari Transport, one of the key investors, decided yesterday that the proposed deal just did not stack up. Imari was to provide the management expertise. The other investors were to include ACT Venture Capital, an Irish venture capital company, and lAWS, the publicly- quoted food company.
In the High Court on Tuesday, the examiner said some issues were still outstanding, concerning the Department of the Marine and Waterford Harbour Commissioners (WHC).
The commissioners declined to comment yesterday, but sources close to the talks said the problems with the commissioners - who had initially threatened to take legal action if the terms of the rescue package were not altered could have been resolved and were not the main stumbling block.
The investors had agreed to put in around Pounds 5 million to help pay off a percentage of the debts and to provide some working capital. Further substantial investment would have been needed.
It is thought that one of the critical factors in the investors' decision to pull out was the situation facing Bell in the southeast of England. A price war between ferry operators and Eurotunnel is raging and competition is fierce.
The goods in turn are shipped on to Rotterdam, where Bell also has substantial facilities, and then elsewhere in Europe. One source said it was a very difficult problem to solve and would not simply be a question of closing the unprofitable British routes.
Some of the parties are believed to have felt that this situation would not alter in the short term.
This is the second time a rescue package for Bell has failed dramatically. Just hours before the High Court was to give its approval to a previous deal, the key investors, Irish Continental Group (ICG), which owns 25 per cent of Bell, and NatWest Ventures and CVC Capital Partners, who own 30 per cent each, pulled out.
They cited a number of reasons, including objections by the Department of the Marine, Waterford Harbour Commissioners and problems relating to the group's Irish and British pension schemes.
Waterford Harbour depends on Bell for about 70 per cent of its Pounds 3 million annual turnover. It will now have to attract other users, but sources said this would be difficult as Dublin and Cork ports are extremely competitive.
Last night, Mr Jimmy Quinn, spokesman for the Irish Road Haulers' Association, said the collapse was a disaster for all concerned. Irish, British and other European hauliers, especially the French and the Dutch, would be the biggest losers, he said.
Of the Pounds 17 million owed to hauliers, it is thought that Irish hauliers could be owed around Pounds 7 million."The future is very, very bleak," Mr Quinn said.
