Lazard offers $74m investment lifeline to Waterford Wedgwood

Source: Exec Digital USA

Date :31/12/2007 09:45:47

Private equity fund Lazard Alternative Investments has said it will invest $73.4 million in Waterford Wedgwood, the Irish crystal and china maker, through convertible preference shares.

Corporate Partners II, a New York-based, private equity fund of Lazard Alternative Investments, offered a much needed boost to the troubled Irish crystal maker as it subscribed for five million of the shares and brought the total amount raised by selling the stock up to €160 million.

Two Lazard nominees - Lazard CEO Ali Wambold and Jon Kagan, a Managing Principal of Corporate Partners - will join the board.

Waterford Wedgwood experienced a slump this year after product shortages and a weak dollar led to falling sales and widening losses.

Cost rationalization

The funds will be used to support the Group's new marketing and business initiatives and to fund the an on-going programme of cost rationalization measures.

The company has already made efforts to update its core heritage brands and has established relationships with designers, celebrity chefs and other 'trend leaders' to take its brands to new consumers and distribution channels.

Cost rationalization plans announced last month include the halving of its crystal workforce in Ireland, with the tableware manufacturer outsourcing lower-value items to Slovenia and other cheaper central European suppliers.

About a fifth of the company’s crystal production is already outsourced.

The Group has also planned significant further cost reduction measures across manufacturing, administration, warehousing, distribution and other operations, and a portion of the proceeds will be used to fund these activities.

Sir Anthony O'Reilly, Chairman of Waterford Wedgwood, said: "This is a significant milestone for Waterford Wedgwood. We are pleased that Lazard Alternative Investments is committing its capital and senior expertise to our Group.

"The investment represents a significant endorsement of our Company's strategy. I warmly welcome Ali Wambold and Jon Kagan to the Board. Their considerable experience will be a valuable addition to the Group."

December 31, 2007