Invest NI were aware that a long-standing Derry aerospace plant, which shut with the loss of over 80 jobs last year, was struggling for years through under-investment and the loss of orders from one its former customers, Bombardier.
Internal documents released to the ‘Journal’ show that the State investment agency knew of difficulties at the former Maydown Precision Engineering (MPE) factory dating back several years.
MPE was acquired by the Waterford-headquartered Schivo (NI) Limited after being placed in administration in July, 2015.
It was hoped that this intervention would result in a change of fortunes for the firm but the company continued to struggle and went under again in January, 2017 and ceased trading last March.
When administrators were called in for the second time in less than two years on January 6, 2017, Invest NI’s engineering people wrote to the former Economy Minister, Simon Hamilton, with their analysis.
A ‘non-disclosable’ memorandum shows Invest NI were aware that the problems at Maydown were deep-rooted.
The note states: “Due to a lack of investment by its original shareholders, Maydown, faced difficult trading conditions after the 2008 financial crisis, coupled with a reduction in business from its main customer, Bombardier Aerospace.
Invest NI gave MPE a loan of £450,000 in 2012 so that it could continue to trade but the firm continued to struggle.
Over 2013 and 2014 MPE’s management and shareholders “conducted negotiations with a Manchester-based venture capital company, A2E Venture Catalysts, headed by Mr. Amin Amiri, with a view to securing a commitment to acquire the majority of Maydown’s shares.” The internal memo notes that in “July 2014, A2E announced that it acquired 80 per cent of Maydown’s equity with the existing Managing Director, Sean Phelan, acquiring the remaining 20 per cent.”
Mr. Amiri’s new majority shareholdership didn’t improve matters. The firm was placed in administration in July, 2015 and was acquired by Schivo (NI) Limited.
Hopes were once again high that the new ownership would put money into the business but as the Invest NI memo shows, this proved to be wisfhul thinking, and between 2015 and the company being placed in administration again there was little communication between Schivo and the state aid firm.
“Since the new owners took over and established Schivo (NI) Limited in July 2015 Invest NI has endeavoured to engage with the new management team and to offer developmental support to the business.
“Apart from an initial introductory meeting with Schivo management soon after its acquisition of Maydown, the company has not responded to Invest NI’s numerous requests to meet during the last 10 months,” the note shows.