Directors and management at Athlone Extrusions have bought 9.6 per cent of the company for just under £2.9 million.

The sellers were ABN-Amro and Mr Pat Plunkett, who have now sold their entire stakes in the thermoplastic sheet and film manufacturer, based in Athlone, for 83 cents (65p) per share.

Since Athlone was floated in January 1998 at €1.16 per share (91p), the company has been a poor market performer, but finance director Mr Enda Cunningham rejected any suggestion that the latest purchase could be seen as a possible prelude to a management buyback to take the firm private.

Athlone shares reached a high of €1.43 but the deal price of 83 cents is closer to their all-time low level of 57 cents.

Mr Cunningham said the purchase was a recognition by the management and directors "of the value we see in the firm". The group of six directors and nine members of the management team bought 4,455,952 company shares

at 83 cents per share, paying considerably less than the €1.16 flotation price. After the purchase, the six directors own 16.6 per cent of the company.

Following the deal, Athlone directors and management - including two managers not involved in the latest purchase - will own 30.4 per cent of the company. The family of the late managing director, Mr Pat Ryan, retains its 19.5 per cent shareholding.

Last March, the company issued a profit warning, blaming the weak British market for a decline in its British business. Interim profits would fall by about 10 per cent, it warned, though it expected an improvement in the second half, producing flat profits for the year to end September. When the half-year result (to end March) was announced in June, pre-tax profits and turnover were both down 9 per cent down at £2 million and £13.6 million.

Results for the year to the end of November will be released on December 9th, Mr Cunningham said. He declined to comment on the performance for the year, stating that the company was now in a closed period in which, under-Stock Exchange rules, it cannot comment on performance.

However, he stated that Athlone had "ambitious targets" to expand the company and bring it back on a strong growth path.

Set up in 1971, the company was the subject of a management buyout in 1990. Before the 1998 flotation, the shares were owned by senior management (28 per cent), institutional investors (35 per cent) and the family interests of the late managing director Mr Pat Ryan (30 per cent).

At that time, the largest single shareholder was managing director Mr James McGee, with a 10 per cent stake. Institutional investors then included a group of investors lead by Mr Pat Plunkett (20 per cent), Irish Life with 10 per cent and New Ireland with 4.5 per cent.

The flotation in January 1998 priced the shares at a multiple of 13 times historic earnings per share. It valued the company at £41.9 million and brought 13 new institutional investors on to the share register. Employees took up almost 1.6 million shares.

At that time, Athlone raised £2 million for working capital and expansion through a placing of 2.2 million new shares.

The then shareholders sold more than 5 million shares, raising £4.6 million, with the family of Mr Ryan selling just under £3.5 million worth of shares.

Irish Life sold 600,000 shares but retained an 8.3 per cent stake, while New Ireland reduced its stake to less than 1 per cent.