SWS board to hold vital talks with IAWS boss

SOUTH Western Services board of directors will hold a crucial meeting with IAWS boss Philip Lynch on March 30.

Mr Lynch, who is chief executive of IAWS Co-operative, has offered €50m to buy out the key wind and waste services of Bandon-based SWS.

Management of SWS has reservations and some favour going it alone. For senior SWS executives, a lot of money is riding on the deal.

SWS managing director Kieran Calnan could have a stake worth €10m on the basis of his current holding, while other key executives will also be worth millions as a result of their stake in the business.

However, four west Cork Co-ops Lisavaird, Barryroe, Bandon and Drinagh more or less favour the deal.

Reports that Lisavaird favoured a solo operation independent of IAWS have been denied.

The deal has moved from a merger to an outright takeover of the energy, waste and business process outsourcing end of the business.

It had a March 7 deadline, but unresolved issues have forced Mr Lynch to extend the process to the end of the month. Tricky earn-out clauses are said to be delaying the finalisation of the deal, but other factors are also at play.

Part of the initial offer to the five co-operatives that include Dairygold was based on three new wind farms being up and running before the end of December 2005.

One of those is facing delays and that could alter the price on offer from IAWS.

However, even if this should fall back to €40m, it is reckoned the west Cork quartet would be happy to take the lower offer. In general, they believe the executives of SWS secured too good a deal initially and they now want rid of SWS.

SWS argues the €130m spent by Mr Lynch buying NTR shares was a bad move.

It will make it harder to float the company within three years as originally envisaged.

Others in the wider investment community share that view and believe Mr Lynch paid over the odds for his 26% stake in the toll road to waste management group.

Some associates believe the investment to be passive and that

Mr Lynch regards NTR's grip on the toll road market and its waste management potential leaves it well-placed for strong growth.