Grant repayments demanded from North's firms

Invest NI has demanded telecoms firm Nortel repays a £7.4m (€8.4m) public grant after it went into administration.

The government body claimed the Co Antrim company had breached a June 2006 financial assistance agreement.

In March, 87 staff were released at its plant in Newtownabbey by the firm, which cut 3,000 jobs worldwide.

In January, its UK operation went into administration after its parent firm filed for US bankruptcy protection.

Enterprise Minister Arlene Foster said: “On foot of Nortel entering Administration in January 2009, Invest NI (INI) determined that Nortel had breached a June 2006 Financial Assistance Agreement.

“As a consequence, the earn-out facility was no longer made available and a further invoice for £7.4m (€8.4m) for restitution in cash in place of the earn-out provision was issued to the company in February 2009.”

Approximately £24m (€27.2m) of grant support was offered to Nortel Networks UK supporting significant investment at its Monkstown site.

Following the dotcom downturn of 2001-03, Nortel began initiatives to increase its competitiveness, including the outsourcing/sale of parts of its operations. As a result, in 2005 INI commenced a review aimed at clawing back funding provided to Nortel.

Liability on the part of Nortel of £17.4m (€19.7m) was subsequently agreed and, of this, the company had, by March 2009, repaid or earned-out a total of £15.07m (€17m).

The grant figures have been published in response to an Assembly question from SDLP MLA Alistair McDonnell.

INI has also said it wants Visteon to repay a £88,606.78 (€100,450) research and development grant.

In March the car parts company placed its Belfast plant in administration with the loss of more than 200 jobs.

FG Wilson, which has also shed posts, received £24m (€27.2m) which Ms Foster said helped it increase employment from 2,000 in 1999 to a peak of 3,500 in 2008 before falling back to 2,400 this year.

Bombardier received £45m (€51m), which the minister said was integral to major aircraft programmes undertaken by the company.

That figure does not include assistance agreed for the new C Series aircraft. Government support for that project is expected to be about £52m (€59m).

Ms Foster said: “These projects generated new investment in Northern Ireland, jobs and extensive wider economic benefits through knowledge transfer and supply chain business.

“In addition to the projects supported by Invest NI, Bombardier has undertaken significantly more total investment than that which received direct Invest NI assistance.

“The company continues to perform strongly, allowing for the effect of the international economic recession.”