30
GUARAN
VARANT
CREDITS
VTEE
DEPARTM
Original at:KIC 16471
This Copy for:
Information only / Action on
Fara(s)
EXPORT CREDITS GUARANTEE DEPARTMENT
Aldermanbury House
Aldermanbury
Telephone: 01-606 6699 Ext 552
London, EC2P 2EL
Telex: 883601
see (32
R D Clift Esq
Hong Kong and General Department Foreign and Commonwealth Office LONDON SW1A 2AH
Dear Kreft,
ECGD PROJECTS IN HONG KONG
NKK 172/1
RECEIVED IN REGISTRY NO. 5
0 6 OCT 1980
DESK CICER.
INDEX
No
PA
REGISTRY2 October 1980
Action Taken
10! AW 9/10
Aw
23
1. Thank you for your letter of the 26 September. It is certainly our intention to discuss with the Governor and with the appropriate Hong Kong Government officials ECGD's attitude towards loan security for the Hong Kong utilities.
Kowloon Motor Bus Company
2. We have looked very carefully at the financial information and the cash flow projections that have been provided but we can find no reasonable basis for increasing our unsecured commitment beyond the £21m already agreed unless we have third party security.
Castle Peak 'B'
3. We have outlined, in Mr Cotterill's letter of the 3 September to Gordon Manzie, the security position we expect to achieve and the reasons why we consider these to be necessary. There is little that I can add to this. Despite our belief in the continuing good economic prospects for Hong Kong and the operation of the Scheme of Control, it is an inescapable fact that a limited liability company or group of companies is seeking to borrow amounts which by any normal prudential standards would be unacceptable on an unsecured basis. I can understand the problems for the Hong Kong Government in the provision of any form of full guarantee but it is a fact that the Scheme of Control expires in 1993 and we certainly need assurances as to the Hong Kong Government's tariff policy up to and beyond that date on the lines suggested in paragraph 5 iii of Ken Cotterill's letter.
Jones
C C Birch
ENC
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