What rights, under the Memorandum and Articles of Association, does the Minister hold in the appointment of directors?
Committee on Finance. - Nítrigin Éireann Teoranta Bill, 1969:Committee Stage.
Sections 1 and 2 agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill".
They are appointed by me after consultation with the Minister for Finance.
The Minister's shareholding means he is the boss?
Yes.
Question put and agreed to.
Sections 4 and 5 agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
Is the position as I indicated last night I thought it was, namely, that most of the £2 million has already been borrowed?
Yes.
I take it that the Minister for Finance was able to guarantee only up to £1 million?
Yes.
Have the company been paying two different rates of interest—one rate on the borrowings the Minister for Finance was able to guarantee and a higher rate for their other borrowings?
Yes. The £1 million is the limit which could have been guaranteed. We are now proposing to raise that to £2 million. It is true that two different rates of interest were being paid. Only £1 million was guaranteed. The figures from the balance sheet as at 30th June, 1969, show bank overdraft and bills payable—£1,823,047.
Apart from the fact that there is the question of different rates of interest, this is really a justification for raising the guarantee to £2 million.
That is true. Another point, which is coming up on an amendment, has another bearing on the extension of the guarantee.
Has most of this borrowing been done outside the State?
Some of it has, certainly. The guaranteed borrowing is outside the State.
At what rate of interest?
At the moment, I am not in a position to say. Maybe, if I were, I should have to think whether or not I should do so.
Question put and agreed to.
NEW SECTION.
I move amendment No. 1:
Before section 7 to insert the following new section:
(1) Section 7 of the Principal Act is hereby amended by the insertion in subsection (1) after "and the payment of the interest" of "or the due payment by the Company of instalments of moneys outstanding under a contract entered into by the Company or the interest on any such moneys outstanding or both the payment of such instalments and such interest.".
(2) In section 7 (4) (c) of the Principal Act and section 6 of this Act "principal" shall be construed as including moneys outstanding under a contract entered into by the Company, and in sections 9 (b) and 9 (c) of the Principal Act "moneys borrowed" shall be construed as including moneys outstanding under a contract entered into by the Company.
I am proposing this amendment because of terms now offered by plant suppliers to the company on a current purchase. The plant is offered on advantageous terms to be paid for by instalments over a number of years.
The suppliers, or their bankers, want the arrangement guaranteed by me as if the capital sum were being borrowed by the company. The wording of the section dealing with guarantees in the 1963 Act does not cover a transaction of this kind, although there is no great difference of substance, and it is now proposed to make this provision to cover the case. The total sums that may be guaranteed in this way or by direct borrowing will remain within the overall limit of £2 million. Particulars of these guarantees, in whatever form, will be laid annually before the Oireachtas.
Subsection (2) of the new section is required to expand the meaning of the words "principal" and "moneys borrowed" where used in connection with guarantees, so as to cover transactions of this kind. I think this is of benefit to the company and creates no additional danger as far as the investment of the State is concerned.
I think this is a sensible provision. Obviously, these contracts are being entered into by all people in this sort of business. I do not intend to comment on them. I understand what the Minister wishes to do.
Amendment agreed to.
Sections 7 to 11, inclusive, and Schedule agreed to.
Title agreed to.
Bill reported with amendment, received for final consideration and passed.