BILLIONAIRE financier Dermot Desmond has agreed to pump up to an additional €10m into troubled Irish travel software firm Datalex as it deals with the fallout from the Covid-19 pandemic.
Datalex said the additional €10m debt facility would be drawn down only if required and would require shareholder approval.
It increases Mr Desmond's debt commitment to the company to more than €21m. He owns nearly 30pc of Datalex.
The billionaire also has agreed to extend the repayment date on an existing loan from one of his investment vehicles to Datalex by one year to November 2021.
In its 2019 annual report published yesterday evening, Datalex said it generated adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of $500,000 (€445,000) last year. That compares to a $1.9m adjusted ebitda loss the previous year. Its after-tax loss in 2019 was $12m compared to a loss of $47.2m in 2018.
It's believed the group saw its financial performance improve significantly during the second half of 2019. Its revenue last year was unchanged at $45.1m.
Mr Desmond shored up Datalex after it was rocked with an accounting scandal early last year. It emerged that the company had materially misstated its first-half results for 2018 after a huge over-run on costs, primarily related to a contract with Lufthansa. A dispute between Datalex and the airline is now in mediation.
Mr Desmond agreed to provide a total of €11.1m in debt to the stricken software firm, with at least the initial tranche attracting a 10pc interest rate.
It's likely the fresh debt being made available will carry a similar coupon. The amount owed to the financier by Datalex has reached about €13.2m.
Datalex had culled its staff numbers from 271 at the end of 2018 to 164 at the end of last December. About 10 more have been let go since then.
Trading in the company's shares has been suspended since May 2019. Datalex had originally hoped to have that suspension lifted before Christmas so it could embark on an equity fundraising that would be aimed at raising sufficient funds to repay Mr Desmond, and also to sound out the appetite for additional equity investment.
"The group is in advanced discussions with the Central Bank of Ireland and Euronext Dublin regarding the lifting of the suspension of trading in the company's shares and expects to be in a position to provide an update shortly," said Datalex chief financial officer Niall O'Sullivan in the company's annual report.
With the company due to hold its AGM by early September at the latest, it will likely aim to have that trading suspension lifted by then.
Datalex's customers include airlines worldwide including Aer Lingus, China Air and JetBlue.
Chief executive Sean Corkery said in the annual report that customers continue to see Datalex software as providing "considerable value".
"Notwithstanding the effects of Covid-19, we are well placed to benefit from a recovery in travel and with our new strategic plan - 'Driving Accelerated & Sustainable Growth' - already in motion, we are ready for a return to consistent growth and profitability."