SUPPLEMENTARY MEMORANDUM FROM THE INDUSTRIAL CREDIT COMPANY, LIMITED
SIGNIFICANT DEVELOPMENTS RELATING TO THE INDUSTRIAL CREDIT COMPANY, LIMITED (ICC) DURING THE PERIOD 12th MARCH 1980 TO THE 31st JULY, 1980.
Results for Half Year to the 30th April, 1980.
ICC recorded a profit of £1,505,000 for the six months to the 30th April, 1980. This represents a 7% increase on the £1,405,000 profit recorded for the six months to the 30th April, 1979.
Advances for the 6 months to the 30th April, 1980 increased by 27% from £28.6 million (corresponding period last year) to £37.4 million.
The Chairman announced that projected advances, based on the volume of commitments at the half year stage, were likely to exceed 1979’s record figure of £66.2 million.
£50 Million Working Capital Loan Scheme
ICC announced the introduction of this scheme during July to enable working capital loans totalling £50 million to be offered to small and medium sized manufacturing concerns at concessionary rates of interest.
The scheme involves the raising by ICC of the equivalent of £50 million in Deutschemarks. This borrowing will be used to provide working capital loans, denominated in Irish pounds, to manufacturing concerns. The credit risk will be borne by ICC and credit assessment will be in accordance with ICC’s normal criteria.
Any manufacturing concern is eligible provided:
—it employs up to 250 people,
—it has fixed assets of not more than £2.5 million,
—if it is a subsidiary, the group to which it belongs employs up to 500 workers and has fixed assets of not more than £15 million.
Loans provided under the scheme will be for additional working capital as distinct from the re-financing of existing borrowings. The maximum loan that can be provided under the scheme is £250,000 for any one concern.
The principal features of the scheme are as follows:
—The rate of interest to the borrower will be the London interbank offered rate for the three month Deutschemarks (LIBOR) plus a margin which will include an exchange risk premium. The exchange risk premium will be ⅞% per annum.
—Interest rates will be reviewed every three months.
—Loans will be repayable over periods varying between three months and five years depending on the requirements and circumstances of the borrower.
Any exchange losses will be borne in the first instance by an exchange risk fund. This fund will comprise £2 million contributed by the Employment Guarantee Fund of the Tripartite Standing Committee on Employment plus the exchange risk premium included in the interest payable by the borrower. Any losses in excess of the amount of the fund will be borne by the Exchequer. No exchange loss will be borne by the borrower.
Energy Saving Scheme
On the 31st of July the negotiation of a £3 million loan from the European Investment Bank was announced. This loan is to be used for energy conservation projects. The money will be made available in Irish pounds at a rate of interest of 12.5% to firms employing up to 250 people and with fixed assets not exceeding £2.5 million.
Further Borrowing from the EIB
During the period under review ICC completed a further loan agreement, involving additional borrowing equivalent to £10 million, from the European Investment Bank. This brings the total amount available to ICC from the EIB to £42.5 million.
EIB loans are available to manufacturing firms employing up to 100 people which have plans to finance new fixed assets. These loans are made available at a fixed rate of interest (12.5% per annum at present) and are repayable over 10 years. The Government underwrites the exchange risk involved.
Irish Film Finance Corporation Limited—Voluntary Liquidation
Irish Film Finance Corporation (IFFC) Limited which was a wholly owned subsidiary of ICC and which had been dormant for a number of years went into voluntary liquidation on 14th July, 1980.
31st July 1980