The simple answer to Deputy Cosgrave's question is that a separate Bill will be introduced setting up the separate company, but, since it is part and parcel of this Bill, to that extent I owe an answer to the Deputy on his question. The Industrial Credit Company is, of course, the company normally charged by the State with financing loans for industrial purposes, that is, loans that are not normally sought through the ordinary financial means, like the banks. However, in future, it is envisaged that the Industrial Credit Company will have this subsidiary, so to speak. It will not be a new organisation. It will be a company managed by the Industrial Credit Company but the new holdings company will be able to make separate arrangements perhaps on more favourable terms than would be normally expected from the Industrial Credit Company for special loan facilities or special holding facilities in industrial enterprises.
During the Second Reading of this Bill I gave some indication of how the new finance company would work. In the first place, in the case of capital intensive industries, that is, industries where the capital invested is very high in proportion to the number of workers employed, there will be a requirement that whatever grant will be given—if a grant is given—and whatever loan assistance might be given, the grant-cum-loan assistance will not exceed two-thirds of the entire capital invested in the project. Therefore, one-third of the actual capital invested will have to come from the promoters themselves.
Loan investments by the State will take two forms, an ordinary loan on the usual rates provided by the Industrial Credit Company and a loan on more favourable terms provided by this new finance company. As I pointed out during the Second Reading debate, the finance company's loan will be at whatever rate can be negotiated, perhaps a favourable rate, but it will be up to the promoters to redeem that loan at any time, and if it is redeemed within seven years, it will not be interest-bearing. If it is not redeemed within the seven years, it will then bear the same rate of interest as the commercial loan which has been negotiated with the Industrial Credit Company, plus a percentage of the profits over and above that rate, that is, a percentage of the dividend over seven and a half per cent.
That is just an indication as to how this finance company would operate in this instance, but in the future, there may be other capital intensive industries that would come into the country requiring public financing over and above what we envisage now, and the purpose of setting up this company, which, as I have said, will be set up under a Bill to be introduced shortly by the Minister for Finance, will be to answer future demands, to make finance provision for such industries in order to ensure we will have the necessary legislative machinery at our disposal and further, to ensure that, with the aid of that legislative machinery, we will not endanger the prospect of such industrial projects coming to the country. In the very near future, the Deputy will have a fuller opportunity of discussing this on the Bill to be introduced by the Minister for Finance.