XN000022-1988-10-04 — Page 2

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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