Billy Timmins
Ceist:107 Mr. Timmins asked the Tánaiste and Minister for Enterprise, Trade and Employment the stage at which the liquidation of IFI is currently; and if she will make a statement on the matter. [4456/03]
Other Questions. - Company Closures.
I understand the liquidation is progressing in an orderly and efficient manner, though it is likely to take some time to complete the process. Unfortunately, efforts by the liquidator to sell all or part of the assets of the company on a going concern basis have been unsuccessful to date.
The liquidator has also advised me that based on legal advice received he has admitted, as unsecured creditors in the liquidation, claims from the employees of the company to have entitlements to enhanced redundancy payments. It is estimated that these claims increase the total value of unsecured creditors compared with the statement of affairs produced by the board in November last by more than €60 million, though any dividend payable to the workers concerned will be reduced by the amounts received from the ex gratia fund of €24.5 million provided by the shareholders. It is expected that these additional claims will have the effect of reducing the prospective dividend to unsecured creditors generally.
The decision by the Minister and the Government to close IFI with the loss of 620 jobs was not because of Iraq or any world-wide competitiveness issue. It was a direct decision of the Government. We now realise from the Minister's reply that the information given at the time was largely unsubstantiated, that there is an additional burden of €60 million on the State for unsecured creditors of the company or the employees will pay the price for it – it is one or the other. What will be the changes to the pay-out to employees arising from what she has just said, where an additional €60 million for unsecured creditors is required? Second, when will payment be made to the creditors who were promised they would be paid in a short period?
An Leas-Cheann Comhairle:
I would remind the Deputy of the time limit.
When will the disposal of the property take place and will it be by public tender?
Some of the latter questions, as the Deputy will be aware are entirely a legal matter for the liquidator. It is not appropriate for anybody to interfere. It is a matter for the liquidator to decide at the time. We have had many discussions about this.
The closure of IFI happened because substantial public moneys had been invested over a long period in this company and it still continued to have very serious difficulties. It was not justifiable in the current circumstances to invest more public money, more taxpayers' money, in a company which just could not succeed. Ireland is not unique among European countries in not being able to sustain a fertiliser industry.
There are no implications for the taxpayers in the contractual arrangements of the workers. They are unsecured creditors. Under the existing agreed arrangement of the ex gratia payment and the statutory payment, they will get on average €50,000 per employee. Depending on what the liquidator realises for the company but based on the best estimate, with the changed circumstances they will get perhaps another €25,000 per employee. However, they will be unsecured creditors like other unsecured creditors and they have to take their position in the queue in that respect.
The creditors will be paid. Obviously secured creditors will be paid first. The Government and the other shareholder have decided not to look for our money back for the loan we gave the company and that makes available to the liquidator more than €34 million extra towards meeting the liabilities to creditors. I hope they can be paid as quickly as possible but that entirely depends on the speed at which the liquidator can realise resources from the sale of the assets.
Is it not true that the ex gratia payment is working out at less than two weeks per year of service? The Minister mentioned average payments. What is her estimate as to the highest payment an employee might get and the lowest payment an employee might get? Will this average of less than two weeks per year of service be a benchmark for other such closures that the Government might contemplate or that private industry might undertake?
I do not have figures for the highest and the lowest payments, but I can tell the Deputy that the average payment is €50,000.
The Deputies should welcome the extra money for workers. The pension fund is fine too.
They have been paid their statutory redundancy and I understand the ex gratia payment will be paid very quickly. It is estimated that the new arrangement will probably deliver on average a further €25,000, bringing the average to nearly €75,000 per worker. If that is the average, obviously some will get substantially more and others, depending on the length of service, substantially less.
Will the Tánaiste give some indication of when she will be in a position to know the full extent of the liquidator's report and the full details of the winding up of the affairs of the company? Will she submit that to the Deputies at the earliest possible opportunity because there have been changed circumstances related to the House today. If any other additional information comes to her in the near future from the result of the liquidation of the company, will she make it available to Deputies, particularly Deputies from the area concerned as well as the spokespersons?
Yes, I will be happy to do that, subject to legal advice. I do not think there is any reason that information cannot be made available. I will make whatever information I have available to the Deputies later this afternoon.