Unsecured creditors of Ispat - many of whom operate small businesses - are owed more than £14 million (€18 million) by the steel company, it has emerged. At an angry creditors' meeting yesterday, workers accused the Indian-owned company of hanging them out to dry.
The meeting, which lasted more than four hours, agreed to appoint KPMG's Mr Ray Jackson as liquidator, in line with Ispat directors' wishes. A statement of affairs revealed that the company had assets of close to €22 million but overall liabilities of almost €59 million.
Of this, loans advanced by the shareholder (Ispat International) amount to €30.1 million. However, these are unsecured and will take its place in the queue of trade creditors.
Among the unsecured trade creditors, the largest debts are owed to the ESB (€1.93 million), Hammond Lane Metal Company (€1.1 million) and Marine Transport Services in Cork, which is owed €711,600. Bord Gais is owed €900,000, while British Customs and Excise is owed €745,000.
Smaller companies, although owed lesser sums, may find it more difficult to absorb losses. The 407 employees at the steel plant are preferred creditors. They, along with the Revenue Commissioners are owed around €7 million. The company has valued its buildings and equipment at just €3 million, compared with a book value of €15.7 million.
After the meeting, Mr Jackson, one of the State's leading insolvency practitioners, addressed the workers and said his priority would be to ensure their statutory entitlements as well as all other payments were made as quickly as possible. He said he would begin work immediately with a 12-strong team so as to expedite the matter of payments.
There were angry exchanges over the manner in which Ispat had closed the company. One sub-contractor, who waved a cheque for €11,000, which he described as useless, said Ispat had allowed him into the plant on June 15th to deliver goods. His goods had been accepted and within hours the plant was closed down, he said.
When company secretary Mr Harak Banthia tried to explain accountancy procedures at the plant, he was met with further angry exchanges. According to Mr Joe O'Flynn, SIPTU regional branch secretary, the Ispat group of unions will seek immediate answers from Mr Jackson as to the exact nature of the company's finances.
He said workers would not be satisfied until all the answers were put on the table in a transparent manner. The company had abused the workers' confidence by the manner in which it had treated them and only an independent assessment of its performance would now satisfy them. Before the meeting drew to a close, one worker, addressing Ispat Ireland chief executive Mr Jerry Gorman directly, said: "You strung us along and you hung us out to dry. I hope it will never again happen to Irish workers."
In a report in The Irish Times earlier this week, it was stated that employees could receive up to £220,000 each if the pension fund surplus was distributed. This figure was incorrect and, in any case, an Ispat spokesman pointed out that it was up to the pension fund trustees as to what would be done with the fund.
