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Dáil Éireann díospóireacht -
Tuesday, 5 Nov 2002

Vol. 556 No. 3

Written Answers. - Irish Fertiliser Industries.

Damien English

Ceist:

71 Mr. English asked the Tánaiste and Minister for Enterprise, Trade and Employment if a liquidator has been appointed to IFI; if so, his or her terms of reference; if creditors will be paid; and if they can obtain a letter of comfort. [20399/02]

John Deasy

Ceist:

75 Mr. Deasy asked the Tánaiste and Minister for Enterprise, Trade and Employment the situation regarding IFI workers and their severance pay, pensions and other entitlements; and if she will make a statement on the matter. [20394/02]

Pat Rabbitte

Ceist:

76 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment the reasons for her decision to approve the request of the board of directors for the liquidation of IFI; the plans for the future of each of the IFI plants; and if she will make a statement on the matter. [20370/02]

David Stanton

Ceist:

80 Mr. Stanton asked the Tánaiste and Minister for Enterprise, Trade and Employment the way in which she plans to ensure that the workers at IFI get their full statutory redundancy payments and other entitlements; the extra amount of money she intends to make available to ensure a fair and reasonable redundancy package; the timescale for same; and if she will make a statement on the matter. [20256/02]

Pat Rabbitte

Ceist:

87 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has brought to Government proposals for the fair and reasonable redundancy payments package for IFI workers to which she referred at her meeting with the trade unions on 17 October 2002; and if she will make a statement on the matter. [20371/02]

Emmet Stagg

Ceist:

104 Mr. Stagg asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the serious situation facing workers at a company (details supplied) where there is reported to be a shortfall in the workers pension scheme and insufficient money to pay workers; in view of the Government's position as a majority shareholder in the parent company, the steps being taken to ensure that workers at this company are treated fairly and that all obligations to them are fully met; and if she will make a statement on the matter. [20378/02]

Paul Kehoe

Ceist:

107 Mr. Kehoe asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans in respect of the reopening of a fertiliser plant in Arklow, County Wicklow; if she has any study under way to assess the viability of such a venture, arising from the closure of IFI, with the result of job losses announced by her in recent weeks; and if she will make a statement on the matter. [20122/02]

David Stanton

Ceist:

161 Mr. Stanton asked the Tánaiste and Minister for Enterprise, Trade and Employment the situation regarding the pension schemes pertaining to Irish Fertiliser Industries; the value of the schemes at present; the shortfall, if any; her further plans for the scheme; and if she will make a statement on the matter. [20238/02]

Arthur Morgan

Ceist:

169 Mr. Morgan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will give a commitment to honour the wage and pension entitlements of all IFI workers, especially those in Belfast; and her views on whether the Government should set the highest standards in the workplace when dealing with employee rights and working conditions. [20560/02]

I propose to take Questions Nos. 71, 75, 76, 80, 87, 104, 107, 161 and 169 together.

As the House is no doubt aware, the board of IFI decided on 15 October that, in the light of the financial position in which it found itself, the company would have to cease trading and that it was recommending to the shareholders that a liquidator be appointed. The board took this decision after both shareholders indicated that they were not in a position to continue supporting the company in the absence of a realistic viability plan. Unfortunately, the company was not able to produce such a plan and, instead, sought funding of €10 million to support a short-term survival plan. Even then, the board accepted that the level of funding sought might prove inadequate. The shareholders were concerned that even relatively small setbacks to the plan in the short term would inevitably result in further requests for support and could not see a basis for further injections to the company.

The winding down of the business has been taking place in the period since the board's decision. I pay tribute to the professionalism of those who have been actively engaged in decommissioning the company's plants in a responsible, safe and orderly manner. The workforce is to be admired and congratulated for this responsible attitude. The board of IFI has called a creditors' meeting for Friday, 8 November and it is expected that a liquidator will be appointed then. The roles and responsibilities of the liquidator are well established in company law. Essentially, they are to realise the assets of the company in an efficient and effective manner with a view to satisfying the company's debts to the maximum extent possible. The future of the various plants, therefore, will depend on the outcome of the liquidator's efforts to maximise the value of the assets. The board will present a statement of affairs at the creditors' meeting and this will give a clearer picture of the position of all creditors, though the actual position can only be determined with certainty when the assets of the company are realised.
While neither the Government nor ICI, the other shareholder in the company, considers it appropriate to give letters of comfort to creditors, both believe that an orderly wind-down and liquidation is in everybody's interest. In this regard, the shareholders have agreed, even though there is no legal obligation to do so, to provide a sum of nearly €24.5 million to coverex gratia redundancy payments to workers. When combined with statutory entitlements, payable by the liquidator, a total of nearly €32 million will be available which should be enough to provide an average payment of over €50,000 per worker, a sum which is considered fair and reasonable in the circumstances. The exact terms for the distribution of the funds will be determined following discussions between the workers' representatives and Mr. Ray Jackson, who is being appointed as sole trustee of the trust which is being used for this purpose. Both shareholders have agreed, in principle, to subordinate loans of €34 million to the company in favour of the other creditors.
I am happy to advise the House that the shareholders have responded favourably to a request from the IFI unions for interim payments to workers pending the determination of the basis for the allocation of the funds available. We are currently making arrangements which will facilitate payments amounting to the lower of €5,000 or three months pay. Without this initiative, the workers faced the prospect of severe cashflow difficulties within a very short period of time because the company was only in a position to pay wages due up to the date of the lay-off. It is likely to take a number of weeks to arrange payment of statutory entitlements.
There seems to be difficulties with the pension scheme for the Belfast employees. However, I understand that the position for the schemes covering most of the staff in the other locations may be somewhat better, though it is still too early to rule out problems. It is obviously a matter of extreme concern that employees' pension entitlements may not be met by their pension funds. However, I understand that the company has been meeting its obligations to the various schemes and that the difficulties stem mainly from adverse stock market movements, rather than from any default on the part of the company. It should be noted that the recent stock market developments would have had a significant adverse impact on virtually all pension funds. Pensions issues are, by their very nature, very complicated and the trustees of the various schemes will have to establish the full facts for each of the schemes and consider the range of options available to minimise the shortfalls involved. This would presumably include seeking to maximise any possible recoveries from the liquidator or other parties. I expect that it will take some time for the various issues to be clarified.
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