11 January 2002

End of the line at steel plant

By Tommy Barker
Irish Examiner 11/1/02

THE break-up of the steel-making plant at Irish Ispat has commenced. Interest has already been shown in some of the multi-million pound machinery belonging to Irish Ispat, in liquidation, from the US, Germany and even China.

Among the plant items to be sold are furnaces, casting machines, steel mills, cranes and electrical transformers. An electric arc furnace, built in 1980, is one of the largest items to be sold and moved: with a 75 MVA transformer and back-up, it reputedly has the single biggest electricity demand of any piece of machinery in the State, comparable to the energy demands of a mid-sized Irish town.

Moves to sell the actual land at Haulbowline Island in Cork harbour occupied by Irish Ispat/Irish Steel, which will raise the largest sums from Irish Ispat's liquidation, will not be made until later this year when the plant has been sold off and moved, the Irish Examiner understands.

Among those likely to have an interest in acquiring at least some of the lands will be the Naval Service and Department of Defence, which has said it is keen to get more berthage space for its adjoining Irish Naval Base at Haulbowline.

The Ispat site of c60 acres includes a dry dock, good deep water berths and some 50,000 sq metres of buildings.

Ispat's heavy steel making plant and machinery is being marketed internationally by Lisney in Dublin and Cork, who report encouraging initial interest in some of the more valuable equipment from the loss-making steel mill which went into liquidation last July.

Efforts by liquidator Ray Jackson of KPMG to find a new operator for the plant as a going concern failed to find a suitable buyer after several months of canvassing other steel-making companies - hence the break-up of the plant, where up to 400 jobs have been lost and where creditors are owed tens of millions of euros.

Mr Jackson was unavailable for comment on the break-up process as he was out of the country.

Don Meghen and Aidan Boland of Lisney are involved in the sale of the plant, and have placed advertisements in specialist magazines and journals worldwide, as well as circulating all steel manufacturing companies about the sell-off. According to Mr Meghen, it is too early to say what sums will be realised from the plant sell off, but it's likely to yield millions of euro.

Industry sources suggested at one stage since the liquidation that the total assets, including land, could come to as much as €25 million, but the vast bulk of the asset value is likely to attach to the lands.

Moves are afoot to improve the title to sections of the Irish Ispat lands with the assistance of the Department of Finance.

The company, formerly Irish Steel, was sold to Indian company Ispat for a nominal £1 after the new owners agreed to take on the £27m debt the company had run while in State ownership.

Lisneys declined to comment on what moves had been made to prepare the Ispat lands in Cork harbour, facing Cobh town, for eventual sale.

While the Navy may have an interest in some if not all of the land, and its acquisition would made sound sense in security terms as well as meeting spatial needs, sources close to the proposed new Marine College for Ringaskiddy suggested they would have no interest in locating on Haulbowline Island. Irish Ispat last year sold land close by at Ringaskiddy for about £3.5 million for the planned new marine college.