OCC
262405 TRSY G
883601 ECGDH G SRL 3413108
DESPATCHED
62
L
pleapes
to HKGD.
13 NOV 1978
FOR MR E WHITEAR
Ju.
SC&D COMMS
FROM ECGD - PD4 FIELD
ON 22ND JUNE 1976 UNDER YOUR REFERENCE AEF3 20/7/01 REG FORDHAM AGREED A PRE SHIPMENT FINANCE FACILITY FOR DRAKE + SCULL ENGINEERING HT CONNECTION WITH A £1CM CONTRACT WHICH THEY HOPED TO WIN FOR THE HONG KONG MASS TRANSIT RAILWAY SYSTEM. THE FINANCE, (SOME £0.75M) WAS TO ENABLE DRAKE + SCULL TO RAISE A PERFORMANCE BOND WHICH WAS NOT SUSCEPTIBLE TO ECGD BOND SUPPORT BECAUSE PAYMENT WAS TO COME FROM A BUYER CREDIT FACILITY.
IN THE EVENT DRAKE + SCULL WERE NOT REWARDED THE CONTRACT AND THE FACILITY WAS NOT USED. HOWEVER, THEY ARE ABOUT TO TENDER FOR CONTRACT NUMBER 363 OF PHASE 11 OF THE SAME PROJECT AND THEY HAVE THE SAME DIFFICULTY OVER THE PERFORMANCE BOND. THE PROPOSED CONTRACT VALUE IN THIS CASE IS TO BE OF THE ORDER OF £15M AND THE FINANCE RENJIRED WILL BE OF THE ORDER OF £1.5M AND WILL BE REQUIRED FOR ABOUT 3 YEARS. THE TENDER HAS TO BE SUBMITTED BY 4TH DECEMBER BUT BEFORE DECIDING TO GO AHEAD DRAKE + SCULL MUST BE ASSURED THAT THEY CAN PROVIDE THE PERFORMANCE BOND IN THE EVENT THEY WIN THE CONTRACT.
WE HAVE NOT YET SUFFICIENT INFORMATION ON WHICH TO REACH AN UNDERWRITING JUDGEMENT BUT PRIMA FACIE THE PROPOSITION APPEARS REASONABLE AND I SHOULD BE GRATEFUL FOR YOUR AUTHORITY TO PROVIDE A PRESHIPMENT FINANCE GUARANTEE UP TO AN AMOUNT OF £1.5M IN THE EVENT WE ARE SATISFIED THAT THE PROPOSAL PUT TO US IS VIABLE IN UNDERWRITING TERMS.
+++
1530 13TH NOVEMBER 1978
WCH
883601 ECODH GB
262405 TRSY G
HKK173/1.
# ROGSK NO. 31 12571940
RECI
Action
Action!
RECLA
Sent 1609.
INT
to