Page last updated at 09:32 GMT, Monday, 18 May 2009 10:32 UK

Invest NI demands 7m from Nortel

Nortel headquarters in Toronto
Nortel is trying to restructure its operations worldwide

Invest Northern Ireland has asked Nortel to repay a £7.4m grant following the company's decision to go into administration.

INI said that the company had breached the terms of a financial assistance agreement signed in June 2006.

The investment agency also revealed that Nortel has repaid £15m in other grants following earlier cutbacks at its Newtownabbey site.

Nortel's UK operation went into administration in January.

It later cut 220 jobs, 92 of them at the Newtownabbey plant.

An INI spokesman said that when a grant is paid to a client company for creating or safeguarding employment, the company is legally obliged to maintain that employment for a period of time.

Investment

"If the company fails to maintain employment, (or is in breach of its agreement with Invest NI) then the company will be obliged to make a repayment," he added.

"Nortel entering administration is a breach of its agreement with Invest NI and therefore a repayment is required."

A spokesperson for Nortel's administrator, Ernst and Young, said that while they recognise that INI are significant creditors it was too early in the process to agree claims.

The grant figures have been published in response to an assembly question from the SDLP MLA Alistair McDonnell.

INI has also said that it wants Visteon to repay a £88,606.78 research and development grant.

In March the car parts company placed its Belfast plant in administration with the loss of more than 200 jobs.

Mr McDonnell had asked the enterprise minister Arlene Foster to detail the amount of government investment received over the last ten years by Nortel, Visteon, FG Wilson and Shorts/Bombardier.

The four companies have announced significant job cuts this year.

FG Wilson received £24m which the minister said helped it increase employment from 2,000 in 1999 to a peak of 3,500 in 2008 before falling back to 2,400 this year.

Shorts/Bombardier received £45m which the minister said was integral to major aircraft programmes undertaken by the company.

The £45m figure does not include assistance agreed for the new C Series aircraft. Government support for that project is expected to be about £52m.

Nortel received around £24m in grants between 1999 and 2009 while Visteon got £138,172.



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