THE proposed rescue package for Bell Lines, the stricken shipping company, collapsed dramatically yesterday just minutes before it was due to be considered by the High Court.
A group of investors, led by Irish Continental Group (ICG), pulled out citing a number of reasons, including the threat of legal action by Waterford Port Authority if the deal went ahead.
Mr Bill Shipsey SC, for accountant Mr David Hughes, who is examiner to the company told Mr Justice Shanley in the High Court yesterday that a letter had been received earlier in the day from a finance company representing an investor group which had changed the position radically.
The letter, from NCB Corporate Finance, cited six main reasons for the investors' decision to abandon the plan. One of these was the extent of opposition to the proposed rescue plan. It is understood that a number of affidavits had been received by the examiner.
Irish Continental owns 25 per cent of Bell and the investors, which may include NatWest Ventures and Citicorp Venture Capital - which both already own 30 per cent of Bell - believed there were considerable operational difficulties at the Belview Terminal in Waterford which would cost some monies to rectify. The investors also cited the cost of defending any appeal by Waterford Harbour Commissioners to the Supreme Court and the delay which would be caused by such an appeal.
Waterford Harbour is heavily dependent on Bell Lines and the port authority had vowed to appeal to the Supreme Court if amendments to the scheme of arrangement (or rescue plan) it wanted were unsuccessful.
Bell has a 15-year agreement with the port authority dating from September 1993 and is said to account for more than two-thirds of the harbour commissioners income. The development at Belview cost £25 million and the harbour commissioners borrowed more than £10 million for the work.
The rationalisation plan included more than 30 redundancies at the port and a drastically rescheduled financial arrangement with the port authority.
The investors were also said to be very concerned" about various matters relating to the group's Irish and British pension schemes which, it said, could result in "considerable and unforeseen expense" to the group.
They also said that difficulties had arisen regarding the severance arrangement for senior executives of the group living outside Ireland and Britain and these difficulties had resulted in proceedings being instituted against the group and further proceedings were being threatened which could also result in "unforeseen expense".
Bell Lines has trading debts of more than £20 million. Irish Continental, which is a 25 per cent shareholder in Bell Lines, and the other investors were expected to inject £3 million-£5 million in new equity if they could get agreement on the restructuring arrangements
In the High Court yesterday, at Mr Shipsey's request, Mr Justice Shanley adjourned the case until the afternoon. When the case was called in the afternoon, Mr Shipsey said his application was to seek an adjournment until next Tuesday. The examiner had limited opportunity to consider the implications of the letter received from NCB. He had not been able to finalise discussions.
The judge said that, if there was going to be an adjournment, he would propose that the case be adjourned until next Wednesday (11th). He would extend the period of the protection of the court until then and give liberty to the examiner to apply to the court in the meantime.
