Talks on future of SWS after co-ops reject deal
This follows the rejection of the IAWS bid by four West Cork co-ops, which reversed their decision to go with a proposed €64 million deal on the table from IAWS Co-op.
Sources said the upshot of the decision points to Bandon, Barryroe, Drinagh and Lisavaird taking a much more central role in the future operation of SWS which recently published strong results for 2004.
Dairygold, which was totally supportive of the sale of key parts of SWS’s business to the IAWS co-op expressed serious disappointment at the outcome.
Meanwhile, a two-page document circulating among the West Cork co-ops for the past few weeks proposes radical changes to the group structure of SWS.
Entitled An Alternative Plan for SWS, it envisages shares could be bought and sold under a new system.
Such a scheme, if adopted, could allow Dairygold to exit the business, leaving the four West Cork players in control.
Last night an SWS spokesman said it regretted that the deal with IAWS came to nothing given the amount of time absorbed in dealing with the offer.
Management’s main concern now is to ensure all the businesses in the group get the support they need to allow them achieve their maximum potential, he said.
It will give its formal response to the alternative plan next week, he added.
Dairygold holds 53% of the equity in SWS but does not have the voting power to match its stake holding.
Within SWS itself, some members of management had grave reservations about the IAWS deal for some time, while others favoured the sale.
It is also proposed in the eight-point plan to sell the wind farms to the West Cork co-ops while SWS would retain a minority stake in the operations.
One co-op insider said the deal was structured in such a way as to allow Dairygold, which owns 53% of SWS to sell out if it wished.
Dairygold was also in favour of the deal with IAWS and yesterday it said it was disappointed the deal had fallen through.
With IAWS out of the equation it would be wrong at this stage to jump to any final conclusions.
It is understood that deep divisions still exist in the West Cork operations about the future funding of the operations of SWS.
Further tensions within the group are expected in the weeks ahead given the conflicting interests which are quite varied given the number of co-ops and views within those co-ops about the best way to proceed.
