TUESDAY, OCTOBER 4, 1988
RESTRUCTURING OF THE LIFEBOAT FACILITIES
GRANTED TO THE HONG KONG FUTURES GUARANTEE CORPORATION
THE GOVERNMENT, THE HONG
KONG (HKFGC) AND THE HONG
KONG FUTURES FUTURES EXCHANGE
PACKAGE FOR
GUARANTEE CORPORATION (HKFE) HAVE ANNOUNCED THE RESTRUCTURING OF THE LIFEBOAT FACILITIES GRANTED TO THE HKFGC FOLLOWING THE STOCK MARKET CRASH IN OCTOBER LAST YEAR.
AGREEMENT IN PRINCIPLE TO A
BY PROVIDED MADE AVAILABLE
UNDER THE PROPOSED PACKAGE, THE GOVERNMENT WILL CONTINUE TO MARKET PROVIDE THE NECESSARY SUPPORT FOR THE HANG SENG INDEX FUTURES
WAY OF A UNTIL OCTOBER 31, 1989. THAT SUPPORT WILL BE MILLION
BY RESIDUAL REVOLVING FACILITY OF $100
THE
SUBJECT GOVERNMENT.
TO THAT, THE EXISTING FACILITIES WILL CRYSTALLISED AT THE LEVEL OF CURRENT DRAWINGS. BY OCTOBER 31, 1989, NEW RESERVE FUND OF NOT LESS THAN $100 MILLION WILL BE ESTABLISHED THE HKFE IN SUPPORT OF THE CLEARANCE OF TRANSACTIONS ON THE HKFE.
BROKER-LENDERS
BE
A
BY
PRINCIPLE TO AS PART OF THE PACKAGE, GOVERNMENT HAS AGREED IN THE ADVANCEMENT IN REPAYMENT TO
THE
AND
OF THE SHAREHOLDER-LENDERS OF PART
PRINCIPAL AMOUNTS DRAWN UNDER THEIR EXISTING FACILITY TO THE EXTENT OF $200 MILLION. THE PRIORITY THE GOVERNMENT FOR THE REPAYMENT TO GOVERNMENT OF THE DRAWINGS UNDER FACILITY WILL BE
ELEMENTS
THEREAFTER. RESUMED
THE
OTHER
LIFEBOAT WILL REMAIN ESSENTIALLY UNCHANGED.
OF
THE
IS MADE IN RETURN
SHAREHOLDER-LENDERS AND
GOVERNMENT'S
CONTINGENT MILLION," SAID
BROKER-LENDERS REASONS.
IN
ΤΟ
UNDER THE
"AS A RESULT OF THESE PROPOSALS, LIABILITY WILL BE REDUCED FROM $428.5 MILLION TO $100 A GOVERNMENT SPOKESMAN. "THE ADVANCED REPAYMENT TO THE AND SHAREHOLDER-LENDERS HAS BEEN AGREED IN PRINCIPLE FOR TWO
THE CONCESSION FIRST,
FOR THE REDUCTION GOVERNMENT'S CONTINGENT LIABILITY. SECONDLY, THE EARLIER REPAYMENT THE BROKER-LENDERS
WAIVER WILL ASSIST THE BROKER-LENDERS TO CONTRIBUTE TO A NEW RESERVE FUND FOR CLEARING HOUSE OF THE HKFE AND
AND THE BROKER-LENDERS
OF THEIR FUTURES SHAREHOLDER-LENDERS TO INCREASE THE CAPITALISATION
WHERE APPLICABLE, SUBSIDIARIES,
то
THE LEVELS.
OF THE RECAPITALISATION EXERCISE IS ESSENTIAL FOR THE RECONSTITUTION
SOUND FUTURES MARKET IN HONG HKFE AND HENCE THE CONTINUATION OF A KONG," THE SPOKESMAN SAID.
ADEQUATE
31.
THE
THE
"THE PACKAGE WILL ENABLE THE CHAIRMAN OF THE HKFE SAID, RECONSTITUTION OF THE HKFE TO PROCEED. AS PART OF THE RECONSTITUTION, NEW CLEARING ARRANGEMENTS WILL BE INTRODUCED. A RESERVE FUND OF $100 MILLION
ESTABLISHED BY OCTOBER FULLY
1989 COMMENCING DEPOSITS
OCTOBER INSTALMENTS
31, 1988 BY AND OTHER CLEARING BROKER-LENDERS
MEMBERS OF THE EXCHANGE. ADDITION, THE BROKER-LENDERS AND SHAREHOLDER-LENDERS WILL BE
THEIR FUTURES TO RECAPITALISE
WILL
IN
BE
"
THROUGH
THE
IN
REQUIRED
TO APPLICABLE,
COMMITTED IN "I AM GLAD ΤΟ SAY AND THE
WHERE SUBSIDIARIES, ADEQUATE LEVELS. TO DATE, SOME $148 MILLION HAS BEEN SO THE RECAPITALISATION EXERCISE BY THESE MEMBERS. THAT THIS PACKAGE HAS THE FULL SUPPORT OF THE BROKER-LENDERS SHAREHOLDER-LENDERS, HE SAID.
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