The future of up to 120 call centre jobs in Castlebar hangs in the balance following a takeover bid for Cedar, the struggling British software company.
Venture capital group Alchemy Partners has bid £3.8 million sterling (€6.13 million) for Cedar, which employs 1,000 people worldwide - including 120 at the Castlebar call centre, located on the Moneen Road.
The directors of Cedar, which has debts of over £38 million sterling, recommended the five-pence-per-share offer and indicated the company would have to start insolvency proceedings if the offer failed, Alchemy said. Cedar shareholders have yet to accept the bid.
The firm - valued at more than £1 billion at the height of the boom in technology stocks in 2000 - specialises in software and support services to the financial sector. It has operations in the UK, the US and Castlebar, where its call centre supports the marketing of technical and software services to financial services businesses worldwide.
Cedar set up in Castlebar three years ago, but there has been speculation recently about job losses because of trading difficulties. A spokesman for Cedar in London, Mr Ben Atwell, said the company could not confirm if any job cuts would be required at the Castlebar plant. He said the Mayo operation had been experiencing trading difficulties recently - as had the company as a whole.
"Cedar's current working capital requirements were in excess of the funds it had available to it, and without the takeover deal, formal insolvency proceedings would have had to be initiated," Mr Atwell explained.
Alchemy is attracted to a number of "fundamentally good businesses" in Cedar, according to Mr Martin Boland, one of the partners in the venture capital company. He cited Cedar's financial software products in the UK and support services in the United States.
"Their revenues have grown a lot in the past. They've just had a much bigger cost base and fallen on bad times," he added. Alchemy said Cedar would get financial help if shareholders accepted the offer. Cedar's bank, HBOS, provided a £10 million sterling emergency short-term financing facility which becomes repayable on demand with a premium if the buyout fails.
If the offer succeeds, the bank will also transfer £20.4 million sterling of Cedar's £38 million sterling debt to Redac for a symbolic £1, and Redac will give Cedar a £19 million sterling loan with an annual interest rate of 22 per cent.
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