asked the Minister for Agriculture and Food if, in view of the threatened liquidation of United Meat Packers, which is the second largest meat processor in the country, accounting for 20 per cent of the country's beef and lamb exports and employing over 900 full-time employees, he will outline the action he intends to take to help save this company during the coming critical week and afterwards, if necessary.
Private Notice Question. - Threatened Closure of Meat Processing Company.
asked the Minister for Industry and Commerce if he will outline the action the Government are taking to protect the 900 jobs which are at risk at the United Meat Packers plants.
asked the Minister for Agriculture and Food if he will outline the matters discussed at the meeting yesterday between officials of his Department and the chairman and managing director of United Meat Packers; if, in view of the very serious implications for the company's 900 workers and for the thousands of suppliers of the failure of the examiner to secure finance from the banks for the proposed rescue package, the Government intend to take any steps to assist in the process; and if he will make a statement on the matter.
asked the Minister for Agriculture and Food the steps he has taken to prevent the closure of the United Meat Packers plants; if he has had any meetings with the management of the company; if he has had any meeting with the banks from which the examiner appointed by the High Court is seeking the necessary finance to complete his examination; and if his attention has been drawn to the appalling social and economic consequences of the Government's failure to assist the company in a fashion similar to the Goodman enterprises in 1990.
asked the Minister for Agriculture and Food if he will make a statement on the present situation in relation to United Meat Packers in light of the imminent threat to 900 jobs.
I propose to take the five Private Notice Questions together.
As the House will be aware, the United Meat Packers Group have been under the protection of the High Court since the appointment of an examiner on 17 February 1992. The current crisis facing the group arises because of the major problems being encountered by the examiner in putting together a financial package to keep the group operational, while he prepares a report for the court on its viability. Yesterday his period of examinership was extended by a further week in order to allow more time for the ongoing negotiations with the relevant financial institutions to proceed. I understand from meetings which have taken place at official level that an amount of some £4 million is needed to meet the group's immediate cash flow requirements.
Officials of my Department have met representatives of the company who indicated the problems facing them and possible means of solving those problems. Also, officials of the Department of Finance have had discussions with the chief executive of the company and with the banks.
Deputies will appreciate that the negotiations have reached a very delicate phase. In these circumstances it would be totally inappropriate for me to say anything that might jeopardise a successful outcome. I am hopeful that all concerned will be able to overcome the obstacles involved and my officials have been instructed to give every assistance to this end.
While I appreciate that the Minister may not want to be specific, will he at least outline what the Government are doing to influence the banks in regard to this issue? It appears that the difficulty lies with just one Irish bank in putting forward something in the order of £4 million. A French bank, Banque Nationale de Paris, with one branch in this country, have been very willing to come forward. Will the Minister say whether he has had any discussions with the banks in relation to this case and in regard to the money which is needed?
As I said in my reply, my officials have had discussions not alone with the company but also with the banks. They are making every possible effort to resolve the immediate difficulties, which will be resolved by an immediate injection of £4 million. However, in the longer term it will take a considerably larger sum to resolve the difficulties of the group.
The immediate difficulty seems to be one of cash flow. Since the abolition of the State rescue agency, Fóir Teoranta, is there any procedure whereby the Government can assist an industry in dire financial difficulties, such as the industry in question? Has that type of rescue operation been abandoned?
In the past week not alone have the Departments of Agriculture and Food and Finance been in constant touch and had meetings with the company and the banks, they have also had meetings with the IDA to enlist their support in this matter. United Meat Packers are a commercial company which have been restructured over the past year. They have been under the care of the examiner since 18 February and it is a matter between the company and the banking institutions with every possible assistance being given by the Department of Agriculture and Food and the Department of Finance, as well as the IDA.
Is the Minister concerned that this case seems to have exposed a pattern felt by Irish business that the securing of capital for working or other purposes from the Irish banking institutions is virtually impossible unless it is asset backed? In the context of the worsening unemployment, does the Minister consider that the Government should give a higher priority to job retention? In the event of the main Irish bank concerned not being able to hammer out a deal with this company, is it the Government's intention to intervene to ensure that 900 jobs currently in existence are not lost as result of a short term problem? Finally, will the Minister say whether an assessment has been prepared for him of the underlying soundness of this company and if he agrees that the problem is a short term one due to cash flow problems?
As I said, there is a short term aspect which requires a sum of £4 million but there is also the more serious long term aspect and that is why an examiner was appointed under the Companies Act — to try to sort out the company's problems in the long term. The relevant Government Departments have given every possible assistance in relation to this matter. As far as Irish banks are concerned, I understand that a considerable part of the difficulties of this group occurred outside this State with companies owned by the group outside the State. It is fair for banks to get reasonable collateral when they are putting in very large amounts of money. To look on the bright side, this morning the group tendered for a considerable quantity of beef for the intervention arrangement and have got the support of the major banking group involved, Banque Nationale de Paris, to support the tender. It means that the group and the bank concerned are optimistic.
What about AIB?
I am calling Deputy Jim Higgins.
It was BNP in this case, but it indicates an optimism by the group and the bank that the company will continue in the short-term at least.
That is just one bank.
I thank the Minister for his ongoing efforts in this regard. Will he agree that since Banque Nationale de Paris have agreed to give first charge on the company's assets to the native Irish banks, those banks could be accused of inflexibility and intransigence in regard to an Irish industry? Will the Minister further agree that the amount being sought — either the short or long term amounts — is a mere fraction of the amount required of £550 million to bail out the Goodman enterprises over 18 months ago? Finally, will the Minister agree that competition is vital to the livestock and meat industry? If this industry, with 20 per cent of the beef kill and 30 per cent of the lamb kill, goes to the wall, we will virtually hand over the monopoly to the Goodman enterprise.
God deliver us from that.
One of the reasons the Government Departments are making such a great effort in this case is, first, because of the importance of the group in the beef and lamb industry and, secondly, because of the social implications of the 900 jobs, many in the west. I am not aware of any such effort being made in regard to any other company in the meat business and I am hopeful that the efforts of the various Departments and the IDA will encourage the banks to facilitate this company to continue as a going concern.
As thousands of farmers are involved in the livestock trade and are customers of the two major banks — and contribute to the huge profits made by Allied Irish Banks and the Bank of Ireland — will the Minister and the Taoiseach approach these organisations to point out that fact to them? They should also point out that it would be in the interest of not just the agriculture industry but the company involved and their employees to supply the money being asked for to keep the company going.
As I have already said, the Department of Agriculture and Food and the Department of Finance have been in touch with the banks concerned and the company. The banks have been told that not alone are there very great social implications in regard to the plants themselves but there are social implications for the many farmers, who are customers of the banks, who supply the plants. It has been made very clear to them that it would be in their interest also to sort out this matter.
I will call Deputy Leyden and Deputy Farrelly if they will be very brief.
I should like to thank the Minister for his personal involvement in this issue. It is vital that the examination continues and is completed as quickly as possible. The Minister is aware of the importance of this company which accounts for 30 per cent of sheep killings and at least 20 per cent of beef killings to the entire industry. In view of the many orders which the company have and must maintain, it is vital that the uncertainty is discontinued immediately. Farmers should be given an assurance that they will receive payments which they are due and work should be recommenced in all the plants, including the plant in Ballaghaderreen in County Roscommon, which is in the Taoiseach's and my constituency. It is absolutely vital——
I asked for brevity.
——that the banks are left in no doubt about their responsibilities in regard to this company.
I must dissuade the Deputy from making a speech. Speeches are out of order.
Do not forget Deputy Louis Belton.
I call Deputy Farrelly.
May I ask the Minister if the Government have considered the possibility of taking an equity share in this company to secure the 900 jobs involved, having regard to the fact that at Question Time today the Taoiseach said he would take all aspects of the Culliton report into consideration?
I said that the State involvement in this matter was confined to the Industrial Development Authority——
I asked about the Government's position.
——who have a role in this regard. The IDA have been contacted to see if they, in their statutory role, could take an equity share in this company.
Is that the opinion of the Government?
I want to say to Deputy Leyden that I will take his interest in the matter into account.
Does that extend to Senator Sean Doherty?
That disposes of Questions for today.