Hibernia Foods in receivership
In a short statement, Hibernia said that KPMG, accountants for General Motors Acceptance Corporation (GMAC), has placed Hibernia Foods into receivership for a financial obligation.
“This financial obligation is in relation to GMAC’s £17.25 million factoring facility,” the company said in a statement.
Hibernia last week announced the sudden departure of chief executive Oliver Murphy and finance chief Colm Devles. On Friday Mr Murphy and Mr Devles secured a High Court injunction restraining the company from taking any further steps to implement a decision to dismiss them.
The company has been plagued by trouble in the past couple of weeks and, after the exit of the two executives, had warned that it may have to delist its share from the Nasdaq, where its shares are traded, for failing to file its annual report for the year to end March 2003.
Unaudited results for that show the company continuing to make losses - reaching €6.7 million for the 12 months to end March, 2003, on flat turnover of 200m. These figures excluded a €4.7 million charge relating to the closure of one of its five manufacturing plants in Britain.
Following the departure of Mr Murphy and Mr Delves, the new management team, led by non-executive directors Harris Cohen and Stuart Anderson, said it was working on "an aggressive business plan" to turn the business around.
The decision by GMAC to place the company in receivership could scupper any plans by the new management.
The company began life in 1991 and was solely involved in beef exports, but the scares created by BSE forced its management to shift its focus to frozen foods and eventually into the frozen dessert and cakes business through a series of acquisitions, which started with the Majestic Food Group in 1997.
It has since made several acquisitions and its best known now for making Entenmanns cakes and Sara Lee frozen deserts.
Hibernia employs around 2,000 people, the majority of whom are based in Britain. It is not clear what impact the receivership will have on jobs at its Irish head office in Dublin. Attempts to contact a Hibernia Foods spokesperson for further comment yesterday were unsuccessful.
Last Friday the shares were trading at 55c on Nasdaq before the news that the company was being put in the hands of receivers was announced. They have fallen heavily in the past year, from a high of $4.11. They have in the past traded as high as $8. At last week’s closing price, the company was valued at just over $12m.
