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GAZETTE
SEPTEMBER 1987
IDA GRANTS
The Industrial Development
Authority Act, 1 986 consolidated
the Industrial Development Auth-
ority Acts, 1950-1981. At the
same time, there has been a major
review by the Industrial Develop-
ment Authority ("the IDA") regar-
ding the procedures under which
grants are made available to in-
dustrial undertakings. The IDA
has resolved to concentrate and
export orientated companies.
Practitioners will however be
more interested in the practical ef-
fects that such changes in orienta-
tion and IDA philosophy will have
with clients who are obtaining
grant assistance from the IDA.
In the first instance, the IDA are
emphasising that it is hoped that a
far greater degree of agreement
will have been reached between a
potential recipient of IDA funds and
the IDA prior to a legal grant agree-
ment being put before the under-
taking. Central to this level of
understanding will be a perfor-
mance criteria agreed between the
IDA and the prospective grantee.
Grants, save those for small in-
dustries, will be related to perfor-
mance of the grantee and hence it
is possible the IDA will seek to
effect stage payments of the grant
which will only be made in the
event of the agreed targets by the
Grantee being attained.
If there is a situation where the
capital development costs of the
grantee are large the IDA will pay
the grant at the outset of the pro-
ject but will insert a clawback pro-
vision into the Grant Agreement in
place of the performance related
provision outlined above. The
clawback provision will apply for
the entire period of the grant and
will be for the entire sum of the
grant, with provision in some cases
for repayment to be claimed on a
pro-rate basis for the grantee's
shortfall in performance.
The IDA will also insist in future
that the parent company whose
subsidiary is the grantee guarantee
obligations of the grantee under-
taken in the Grant Agreement. This
guarantee may either be given
separately or the parent company
may be joined in the Grant Agree-
ment. If there is no parent com-
pany, the grantee will be requested
to give a charge over its assets and
a Priorities Agreement will be
entered into by the IDA with other
secured creditors.
The IDA have also altered the
provisions in regard to Royalties.
Any royalty in excess of 5% of the
turnover must be taken from pro-
fits available for distribution by the
grantee. The Grant Agreement on
the face of it will allow 5% royalty
to be availed of.
Many of the concess i ons
heretofore readily conceded in
negotiations with the IDA will not
now be available. These include
the allowance of a write down of
contingent liability to 50% of the
grant after 5 years of the grant
THE
SO L I C I TOR S'
B E N E VO L E NT
A S S O C I A T I ON
A CASE IN NEED
Mrs. "X" is in her late 40's, she is the
widowof a Solicitor, has five children under
21. Her only income isa widow's pension
and family allowance. She has to provide
for her family and maintain a home. She
faces this enormousresponsibility alone.
Who can she turn to for help? — The
Solicitors' Benevolent Fund.
The Solicitors Benevolent Association
assists such cases - and many others where
the age of dependants of members of the
profession ranges from "under 10" to
"over eighty". The Committee of the
Association meets monthly and its work
covers the entire country, north and south.
The Committee funds come from annual
subscriptions from members of the Law
Society of Northern Ireland and The Incorpor-
ated Law Society of Ireland, together with
additional subscriptions received from Bar
Associations, and individual Solicitors or
firms of Solicitors. In recent years the calls
on the Association's resources have become
more numerous and this year the Committee
faces a relatively large deficit. It urgently
needs extra funds. Subscriptions can be
sent to the Secretary, Ms Clare Leonard,
The Solicitors Benevolent Association,
40 Lr. Fitzwilliam Square, Dublin 2, or c/o
The Law Society, Blackhall Place, Dublin 7.
period has elapsed. The IDA will
now insist on a cash injection to
share capital of 25% of the finance
to be provided by the Grantee.
The IDA are anxious to em-
phasise that the text of the draft
Grant Agreements has been ex-
tremely carefully considered and
therefore what are seemingly
minor amendments will have to
receive, at the least, Board agree-
ment prior to being approved.
Michael G. Irvine, Solicitor
Company Law Committee
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221