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Dáil Éireann debate -
Tuesday, 22 Jun 1993

Vol. 432 No. 6

Written Answers. - Investment of Public Money.

Pat Rabbitte

Question:

81 Mr. Rabbitte asked the Minister for Enterprise and Employment the Government's policy with regard to the investment of public money through taking equity in private firms; if it is Government policy that conditions set for equity in semi-State companies should also be applied to any investment in similar private companies; and if he will make a statement on the matter.

As has been stated to this House before, the Government had previously indicated that funding would be made available to enable Shannon Development, in certain circumstances, to participate in a restructuring of the GPA Group. Shannon Development, having evaluated a proposal to take up the equity option held by Aer Lingus in GPA, had already offered to participate in an equity issue on terms and conditions consistent with a commercial investment.

I am aware of developments in relation to GPA and the General Electric Capital Corporation involving a $1.35 billion aircraft transaction and a related option for G.E to purchase an equity interest of between 65 per cent and 80 per cent in GPA on or prior to 31 March 1997.

I understand that GPA are having discussions with its existing shareholders and Shannon Development in order to clarify the proposed offer. I intend to await the outcome of such discussions and, depending on the nature of any decision taken by the Board of Shannon Development, I would propose to advise the Government in relation to any proposal which emerges.

However, in the absence of precise details at this stage it would obviously not be possible for me to say whether any investment will be made or the terms which would apply should a decision be taken to invest.

In so far as Deputy Rabbitte's question is concerned I would confirm that it is Government policy that, where appropriate, equity stakes may be taken in private firms by the State industrial development agencies such as IDA, Shannon Development and Údarás na Gaeltachta. The circumstances in which this is done, and the terms of investment in individual cases, is a matter in the first instance for the agencies concerned.
In relation to the question of equity in semi-State companies themselves, the Programme for Government makes it clear that investment, including increased equity, will be provided if necessary for the development of viable and profitable State commercial enterprise.
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