Some seven European steel makers have made inquiries about purchasing the Irish Ispat steel plant in Cork as a going concern. The closure of the plant last month led to the loss of 411 jobs, mostly in the Cork Harbour area.
In an interview with The Irish Times, Mr Ray Jackson of KPMG, the liquidator appointed to wind up the affairs of the Haulbowline company, has confirmed that since advertisements were placed in this newspaper and the Financial Times of London over a week ago, seven European steel plants had sought further information.
While initial inquiries have to be considered as tentative and exploratory, the liquidator is happy to have received this level of interest and expects other steel makers will contact his office.
Irish Ispat, part of the Indian conglomerate Ispat International, was formerly owned by the State as Irish Steel Ltd. It comprises buildings and plant on a 17-hectare site adjacent to the Naval Service headquarters at Haulbowline. The land and buildings are held in leasehold from the Government over a 35-year period which began in 1996, the year Ispat acquired the plant in a controversial deal.
Under the agreement, the Government sold its shareholding for £1, wrote off debts of £17 million and invested more than £20 million in the plant. Ispat agreed to invest £20 million-plus over a five-year period which ended shortly before the closure, and to keep employment at the plant above 300 during that period.
A steel plant at the edge of Europe with a small, niche product range and in need of substantial investment to improve production, as well as a poor environmental record, will not be easy to sell, and it may take up to six months, according to Mr Jackson, to determine whether another steel maker is interested.
While he would prefer to identify a new owner who would run the plant and restore some or all of the lost jobs, his brief is to realise the assets at the best price as quickly as possible and distribute the proceeds among the creditors.
A 15-strong team is working on the Ispat inventory. Valuers are assessing the worth of the plant and machinery, and existing stocks are estimated to be worth £7.8 million. Debtors owe the company more than £17 million, but workers are owed £7 million. Large, unsecured creditors, like the ESB, as well as small Suppliers and subcontractors, are owed £45 million.
A 12-acre parcel of freehold land remains in Ispat ownership, and this will be sold with the plant.
Last week, 334 Ispat workers met Mr Jackson and his team in Cork to receive redundancy papers. Each employee received 11 pages of documentation in duplicate which were explained in detail before being filled in and sent to the Department of Enterprise and Employment.
Before the end of the month, the workers can expect their cheques to arrive but the paltry nature of the pay-out will merely be the postscript to the often sorry history of the Cork steel plant, Ireland's only steel producer since it first came into production in the 1940s.
Some workers will receive less than £10,000 after almost 30 years'service; others who served fewer years will get less than £4,000 under statutory redundancy terms.
There is nothing a liquidator can do in the situation, Mr Jackson says, adding: "I am bound by the various Acts such as the Companies Act, the Redundancy Payments Act and the Holiday Payments Act. Even though, in law, I am now Ispat, it is not open to me to dispose of assets so as to increase the payments to the workers. Other efforts are being made by the Government in that regard and I shouldn't comment on it."
Any potential purchaser of the plant will be interested in the integrated pollution control licence which the Environmental Protection Agency (EPA) had imposed on Ispat.
Before and since the takeover in 1996, the plant was the worst polluter in the Cork Harbour area.
The stringent EPA licence was designed to change all that, but to comply, Ispat would have had to invest many millions of pounds. The suspicion among workers is that the company walked away before having to face such costs. Ispat denies this.
Any new owner will have to consider the implications of the EPA's requirements. Verifiable controls would have to be put in place to prevent the emission of pollutants and remedial work done to make safe an unlicensed hazardous dump on the site. The EPA has demanded that samples of sediment in the nearby harbour must be taken to establish if ecological damage has occurred.
Mr Jackson says he is aware of the licence and has asked for legal advice on its interpretation.
In the meantime, orders are still being filled from the existing stockpile and steel sections continue to leave the plant for customers all over Europe.
Up to 40 people, some of them former Ispat employees, are still working at Haulbowline to provide care and maintenance. Mr Jackson says that wherever possible he will try to ensure Ispat workers are taken on at the plant when certain skills are needed.
Everything at Ispat, including furniture and computer terminals, has been itemised and logged.
The thread of hope for Ispat workers and their families is that a serious offer for the plant will emerge over the coming months. If not, Mr Jackson and his team would have no option but to sell off the plant and machinery, bit by bit, at auction.