D’Arcy steps down as CEO of troubled co-op LacPatrick Dairies
Shareholders may be asked to vote soon on possible merger with Lakeland Dairies
Gabriel D’Arcy: stepping down as chief executive of Monaghan-headquartered LacPatrick Dairies.
Gabriel D’Arcy is stepping down as chief executive of troubled co-op LacPatrick Dairies following talks with the company.
The news comes as it appears likely that LacPatrick shareholders may be asked to vote on a possible merger with rival Lakeland Dairies within weeks.
LacPatrick Dairies said on Tuesday that, following talks between the company and Mr D’Arcy, it had been agreed that he would depart as chief executive.
At the same time, it confirmed the co-op’s board has appointed Dr Seán Brady as interim acting head of operations.
Chairman Andrew McConkey said he was confident that Dr Brady’s experience would give the LacPatrick board and management the support they needed. The chairman indicated that neither Mr D’Arcy’s departure nor Dr Brady’s appointment would impact on the merger discussions with LacPatrick’s competitor.
“We remain involved in exclusive amalgamation talks with Lakeland Dairies,” he said. “These talks are progressing and we hope to be in a position to announce further details in the coming weeks.”
It is thought that LacPatrick shareholders could be asked to vote on a possible deal within three to four weeks.
Monaghan-headquartered LacPatrick has been in exclusive talks with Lakeland since late last June.
Cavan-based Lakelands was one of four suitors singled out in April when it emerged that LacPatrick was seeking to join forces with another player.
LacPatrick was formed from a merger of Co Derry-based Ballyrashane with fellow co-op Monaghan Town in 2015.
The co-op boosted borrowing to invest in its business, including building a drier for powdered milk manufacture at Artigarvan, Co Tyrone, which cost €40 million. Its main lender is Danske Bank.
Its 2016 accounts show that bank debt grew by more than €13 million to €30 million, with the long-term element of this doubling to €16.9 million.
Speculation about its future began in the spring when the co-op cut the price it was paying farmers for the milk they supplied for processing.
LacPatrick said at the time that market conditions left it with no option but to cut prices to suppliers.
The company subsequently issued a statement saying it was seeking a merger or strategic partner.
Last week, it announced it would increase prices paid to farmers by one cent to 32 cent a litre for suppliers from the Republic and by one pence sterling to 27.5p for those from the North.
It also increased its June prices to 31 cent and 26.5p. About five of every six litres that LacPatrick processes comes from suppliers in Northern Ireland.
Commenting on Mr D’Arcy’s departure, Mr McConkey said that he wanted to wish the outgoing chief executive, his wife and family the best for the future.
Mr D’Arcy thanked Mr McConkey, the board, management, staff and shareholders for their support.