4. OUR IMPRESSION IS THAT OUR UNWILLINGNESS TO AGREE 2 PERCENT IS NOW RECOGNISED AS BEING A REALPOSITION BUT THERE ARE CONFLICTING REPORTS OF BANKS ATTITUDE TO REDUCING SPREADS. HOWEVER, WARDLEYS CLAIM THAT THEY HAVE BEEN UNWILLING TO CONSIDER ANY MORE FLEXIBLE POSITION UNTIL THEY ARE PROVIDED WITH CLEARER DETAILS OF TOTAL FINANCING PACKAGE AND FINAL ATTITUDE OF HONG KONG GOVERNMENT TO PROPOSED SCHEME OF CONTROL IS KNOWN. BACON SAID HOWEVER THAT ONCE THESE QUESTIONS ARE RESOLVED THERE WILL BE SCOPE FOR RE-EXAMINATION OF SPREAD POSITION. THIS MAY BE FURTHER DELAYING TACTIC BUT REQUIRED INFORMATION SHOULD BE AVAILABLE TO WARDLEYS AND OURSELVES LATER TODAY AND WE WOULD EXPECT TO SEE THEM AGAIN EARLY NEXT WEEK.
5. EXXON HAVE APPARENTLY AGREED THE FINANCING PLAN AND BASIS OF EQUITY CONTRIBUTION AND DIVIDEND POLICY WHICH IS MAXIMUM PAYOUT. YOUR EXCED 34 RECEIVED BUT WE UNDERSTAND CENTS PER UNIT ALLOCATION FOR DEBT SERVICING IS NOW SUPERCEDED BY NEW CONCEPT DETAILS OF WHICH HAVE STILL TO BE WORKED OUT BY CLP BEFORE THEY ARE PUT TO US. WE BELIEVE PROPOSALS WOULD ENTAIL AUTOMATIC REDUCTION OF DIVIDEND PRO RATA TO PROPORTION OF PRINCIPLE DEFERMENT. THIS SEEMS MORE EQUITABLE ARRANGEMENT. MAY REQUIRE YOUR CLEARANCE OF NEW ARRANGEMENTS AFTER MONDAY'S DISCUSSIONS.
6. MEANWHILE CONTRACTUAL NEGOTIATIONS HAVE PRODUCED TWO FURTHER DEVELOPMENTS. FIRST KADOORIE HAS TOLD MACDONALD THAT HE NOW FAVOURS TURNKEY APPROACH. THERE IS, OF COURSE, DOUBT THAT GEC WOULD ACCEPT THIS BUT IF THEY DID WOULD ALMOST CERTAINLY LEAD TO REQUEST FOR BOND SUPPORT ON AL JUBAIL LINES. THIS HAS THROWN GEC NEGOTIATIONS INTO TEMPORARY CONFUSION.
7. GE CARE ALSO DISCUSSING SUPPLY OF SIX GAS TURBINES AT - POUNDS STERLING FOUR POINT THREE MILLION EACH INSTEAD OF TWO
AND ARE EXPRESSING CONCERN OVER COST OF E C G D PREMIUM FOR SUCH ADDITION, AS THE ORIGINAL TWO TURBINES WERE INDIVIDUALLY PRICED AT SPECIAL RATE IN TENDER. WE HAVE TOLD G E C THAT EXTRAORDINARY ASSISTANCE BY E C G D WAS FOR AN ABSOLUTE AMOUNT AND IS NOT ADJUSTABLE UPWARDS FOR CONTRACT ADDITIONS. YOU MAY BE APPROACHED ABOUT THIS FROM STANHOPE GATE.
MARCH
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