Staff at the Miza Ireland plant in Roscrea, Co Tipperary, were told yesterday that a programme of job cuts and cutbacks in hours would begin immediately.
Creditors - who were to be paid in full the last time the Roscrea pharmaceutical operation, formerly called Antigen, went into examinership - will get only a percentage of what is due to them this time.
The examiner, Mr Tom Grace, is trying to cut a deal with UK company Goldshield plc, which has a five-year supply contract with Miza for the manufacture of products for the British National Health Service (NHS). It is understood that a failure to supply the drugs will trigger a severe penalty clause.
Goldshield is seen as the only buyer in the marketplace for Miza. This may place Goldshield in a strong position, for Miza either folds or gets taken over by Goldshield. On the other hand, Goldshield will become liable for the penalty clauses contained in its contract with the NHS if the Roscrea plant closes and it cannot supply the contracted goods.
It is likely that, if any sale goes ahead, it will be a slimmed-down operation that will be bought by Goldshield.
Goldshield said yesterday it was "willing to acquire the Miza group if acceptable terms and conditions can be agreed with the examiner".
Workers are concerned that the company was sold when it was last in examinership to owners who failed to invest the required funds.
Miza Pharmaceuticals of Canada and Goldshield failed to invest in the Roscrea plant, despite an agreement that they would, the High Court was told. The plant was sold to the new investors under a scheme of arrangement approved by the High Court.
The former owner of Miza, Mr George Fasenfeld, was paid €8.5 million. However, the creditors, who were owed €21.6 million, have received only €5.3 million.
Goldshield, in the meantime, bought the intellectual assets of Miza from the Canadian company for €15.2 million.
Miza Pharmaceuticals was founded in Canada in 1996 and has plants in the US and the UK as well as in Ireland. Last year it acquired its UK businesses from Canadian company CCL Industries for a reported €19 million.
It seems the Canadian company was hoping to raise venture capital to develop its UK and Irish assets but the finance never materialised. The UK operation was brought under the protection of the courts in September. Dr Jack Kachkar, the principal shareholder in the Miza group, was not available for comment yesterday.
In April Goldshield, which is quoted on the London Stock Exchange, announced that its premises and the home of executive chairman Mr Ajit Patel had been visited by officers of the Serious Fraud Office as part of an inquiry into a suspected conspiracy to defraud the NHS.
The company said at the time that it believed it had not acted in an "unlawful or improper manner".
