Airport operator DAA, non-bank lender Finance Ireland and Aer Lingus were among 20 companies and projects that drew on €430 million of financing from the Ireland Strategic Investment Fund's (ISIF) pandemic recovery fund last year.
Minister for Finance Paschal Donohoe unveiled the €2 billion Pandemic Stabilisation and Recovery Fund (PSRF) last May under measures to support medium- to -large-sized companies through the Covid-19 crisis.
ISIF said on Monday the DAA secured €40 million of funds, while Finance Ireland raised €17 million, Aer Lingus, €150 million, and aparthotels company Staycity tapped it for €30 million of financing.
A total of €430 million was committed last year by ISIF, part of the National Treasury Management Agency (NTMA). It included direct cash injections from what NTMA chief executive Conor O’Kelly said was an “investor of last resort” and indirect investments through other funds and projects.
ISIF has a pipeline of €600 million of potential further recovery fund investments, mainly in the tourism, leisure and transport sectors, which had been hard hit by Covid-19 lockdowns, according to Mr O’Kelly.
The Aer Lingus funds are via a three-year loan. Mr O’Kelly declined to comment on the rate attached to the loan. “This is a commercial investment,” he said. “It is not State aid.”
The DAA investment was by way of ISIF taking part in a bond sale by the company. The Finance Ireland investment was through the purchase of junior debt in the firm “to support future growth”, a spokesman said. ISIS owns 31 per cent of the company. A total of €25 million of junior debt was raised, he said.
It is believed that US investment giant Pimco, a fellow 31 per cent shareholder, provided the remaining €8 million.
Staycity, led by chief executive Tom Walsh and which has aparthotels in Dublin and 11 other European cities, raised a total of €70 million of debt and equity last year, according to its most recent set of accounts.
Mr Walsh said in an interview last November that ISIF was investing €7 million for a 13 per cent stake and providing a credit line for a further €23 million. Most of the debt has terms that could potentially convert it into equity at a future date, according to the company’s accounts.
Mr O’Kelly committed to providing details of companies in which ISIF has invested directly every six months. He said that half of the number of investments involved the taking of equity stakes.
“We don’t want to be ruthless or opportunistic, [where] companies are under stress and we behave like the most ruthless private equity fund and extract a huge cost and return,” he said.
“But we want to have what we think is a reasonable return for the risk that we’re taking. We also generally want to see participation from current shareholders coming in alongside us. This isn’t a bailout fund for investors. This is a fund to support companies and their employees and their long-term prospects.”
Mr O’Kelly said that in some cases, the fact that ISIF was prepared to invest in some companies was enough to convince private-sector funders to provide the necessary funds.
