Our reference. Your reference.
DEPARTMENT OF ECONOMIC AFFAIRS Storey's Gate, London S.W.I
Telex: 263554 Telephone: TRAfalgar 7848, ext.
23
Hong Kong Tunnel
28 April, 126/
11
Please refer to your letter of the 30th March to Cotterill.
*
e agree with you, and with Cutterill, that it would be unwise for ECGL to tre t t..e loan to the over gnat yer as revenue-e Pain capitai paket in financial - rintee cases; clearly sone form of counter-arantee is req Ared,
le roposition is GO e made commercially viable. But we also consider that several guarantees
private shareholderc are deficient for this purpose.
There is 10 real way of telling in the event of loss how any of these will
t、rn out to be men of straw.
ctive for:
J. I think we are all agreed that the only reɛll7 counte-security in this case is a Maruntee given by the Hon, Kone Government; and recent telerns ow that this is unlikely to va Porti.comin..
Tight rrn c
:
instin
st cl..36 Uimonend dod, uns Cuv rin Cost their as #38#
bile pi K
but ?8 Cotterill h. 8 asked us to ireit 18 A3 un 2d 110c experime. tul exercise, an idea has oc "red to no which al ht re the 1 85e. to front en unconditional ♬ har node succursal completion of the tunnel;
e pased pon Costaln's technical nd financiel stondi.. be then free to attach their risk from the time that the
compl ted and Bc avoid any li@bility in respect o. durin, the construction period. 02 course, SCGD #uld stiil he Mont with an secured repayment risk fter c ́ma g lution.
But they
AD TOVI. bane - unsecured loan
to arvanje or both a lien on Nture revenues and a floating charge the who e assets of the Tunnel Company. The latter could be a m ch more worthwhile security .en the acts of the Tunnel Company include the fully operation 1 tunel,
+
>. I thin. I might now 1 Man in the City tho wou De calit CA
toveth r & syndic te Merchant 23 nd Ina rince CoM to provide such a karanten if thi3 Could .: User1;
I a... thut i would not be resiple fo.
er wot
no :
60 C
construction «riod and the C pallo perica Lor exercisc involves a bstitutin the cobro tord'
inancial resources as the basis of risk colluter:1 participatin., quarantors.
A
311
Jor
C. C. Lucas, Esc.,
H.. Treasury.
bu 15.5.67
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