WITH THE fizz having evaporated last year from its Scottish mineral water division following the revelation of overstated profits, Irish food group Greencore has put the subsidiary on the blocks.

I understand that IBI Corporate Finance is conducting a sale process for StrathLomond natural mineral water and is in advanced talks with one interested party.

Analysts estimate that the business could be worth between £10 million and £20 million.

While it is difficult to sell any asset in the current economic climate, Greencore hopes to conclude the sale of the water business by the end of its financial year in September and pour all its energies into growing its convenience foods business, particularly in the United States.

On Tuesday, when Greencore published half-year results, chief executive Patrick Coveney said it had “fixed” the water business, replacing the leadership and putting in new financial controls.

In a conference call with media, Coveney said he expected it to reach “Ebitda breakeven” this year. He was clear, however, that Greencore was not going to make “a lot of incremental investment in the water business” or seek to “build it out” further.

The Greencore boss stopped short of saying the company would sell the business. This, however, seems to be the plan.

Greencore discovered the fraud in the middle of last year. It resulted in a €4 million loss being recorded in the Irish group’s full-year 2008 results and a €12.7 million, after tax, negative impact for previous years.

Three executives at the water subsidiary were fired on foot of the profit overstatement.

It was an unfortunate start to Coveney’s tenure as Greencore’s chief executive, having only taken the reins from David Dilger three months earlier.

On its website, StrathLomond, which is bottled by Paul Coulson’s Ardagh Glass, says its aim is to become “market leader in the premium water sector”.

It’s an ambition unlikely now to be fulfilled under the ownership of Greencore.