Datalex, the Irish travel software company, is currently facing a race to repay the costly loans it owes to billionaire Dermot Desmond. Reports suggest that the company is struggling to meet its financial obligations, with shares falling by 60% since the start of the year. The situation is further compounded by investigations into potential accounting irregularities and a loss of client contracts. This article explores the challenges that Datalex is currently facing as it battles to repay Desmond’s loans and avoid a potentially disastrous financial situation.
Datalex, a Dublin-listed airline retail software company, sold a block of shares two years ago to repay previous loans from billionaire Dermot Desmond. However, the company’s dwindling cash balance since then, mainly due to the Covid-19 pandemic and lockdowns in China, prompted Datalex to access a €10 million debt facility provided by Desmond. Datalex has already drawn down €9 million from the facility, and the billionaire has agreed to extend the repayment date by 18 months to the end of next year. The interest rate on the loans has increased to 15.5%, set to reach 18% in October if the loans are not repaid. As Datalex plans to secure more capital to repay the debt facility and expand its business, the company has engaged Goodbody Stockbrokers for fundraising options. Seasoned Datalex watchers say the company’s next funding round will have to raise almost €25 million in order to clear the Desmond loans and capture opportunities in a recovering global aviation sector.
In conclusion, Datalex’s struggle to repay Dermot Desmond’s costly loans highlights the challenges faced by companies that take on debt to fuel their growth. While debt can be a useful tool, it also comes with risks that need to be carefully managed. In the case of Datalex, a series of unfortunate events combined to create the perfect storm for the company’s financial woes. As it faces the race to repay Desmond’s loans, the road ahead will be difficult, but not impossible. With strong leadership, strategic thinking and a clear focus on its core strengths, Datalex can overcome this obstacle and come out on top. The company has weathered storms in the past, and with the right approach, it can emerge stronger than ever before.
