Altobridge receivership raises questions

Shareholders in technology developer Altobridge say that questions remain to be answered over the decision to place it in receivership last year.

Intel Capital and the World Bank appointed a receiver to Altobridge last year on foot of a secured debt in a move that resulted in the loss of 45 jobs at its base in Tralee, Co Kerry and a further 85 in its offices outside Ireland.

The exchequer footed the bill for the Irish workers’ statutory redundancy payments, which came to more than €270,000, through the Department of Social Protection.

The appointment angered a number of shareholders who had backed the company from its foundation in 2002. They believed that its key asset – the intellectual property linked to the technology it was developing – remained valuable and that the secured creditors’ decision may not have been warranted in the first place.

Its assets were subsequently sold to iDirect, a subsidiary of Asian giant ST Engineering for $4 million, which was returned to Intel Capital and the World Bank, the secured creditors.

Transparency

According to co-founder and shareholder

Bart Kane

, a number of its backers feel there was not enough transparency around the decision to place the company in receivership in the first place.

He said the only way to establish what happened would be to appoint a liquidator, who would have the right to look at the security that formed the basis for the receivership. The backers want to see accounts for 2012 filed with the Companies’ Registration Office (CRO) which are now overdue. The last returns made were for 2011.

This means that the company runs the risk of being struck off the register for failure to file accounts, which Mr Kane says could put a further barrier in the way of appointing a liquidator. “It could just end up being left to fade away,” he said.

Altobridge was working on developing technology that would allow broadband penetration into rural and remote areas. It raised €1 million in 2005 and €3.5 million in 2006. A number of high-profile figures backed it, including the late Dr Tony Ryan, founder of aircraft leasing giant GPA. Former tánaiste and Labour leader Dick Spring was chairman of the business.

Intel Capital and the World Bank became involved in 2011, initially putting in $12 million but ultimately placing $20 million with the business. The investment resulted in their being granted security over the company’s assets in November 2013, giving them the right to appoint a receiver.

In 2011, the company had a turnover of €16 million. According to a case study by consultant Donal O’Connell, a review of Altobridge’s patents carried out that year indicated that they were potentially very valuable.

Mr O’Connell suggested that the company may not itself have been aware of just how potentially valuable they were.

Increased demand

The microchip maker was interested in the technology that Altobridge was developing as boosting broadband penetration in rural and remote areas would in turn increase demand for computers and other devices. This would then have a positive knock-on effect on demand for its products.

When it invested, Intel cut the size of the Altobridge board from nine to five, a majority of whom were its nominees.

The multinational did not comment at the weekend.