TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 177

&

- 2 -

It was stated that no guarantee would be available

either from the Hong Kong Government or from any Bank.

Tenderers could

As security the Company offered a lien on its revenues

or a mortgage of its assets or both.

assume an average cash flow of the order of £2 million

per annum for the first five years of operation.

4. Costains tendered on the basis of a loan of £8.1

million from Lloyds Bank (representing about 64% of the

contract price af £13 million) repayable over 7 years

from completion for the U.K. element and 5 years from

completion for the local costs element. E.C.G.D. oover

offered

in respect of this loan was made subject to the

following conditions:-

5.

(a) an irrevocable joint and several guarantee

from the main shareholders in the Cross-

Harbour Tunnel Company (Wheelock Marden

& Co.,Ltd. and Hutchison International Ltd.);

(b) an irrevocable lien from the Cross-Harbour

Tunnel Company on the total revenue of the

tunnel, in favour of the lending Bank;

(c) an irrevocable undertaking by these two

shareholders, together with the Hong Kong

Government, the Hong Kong & Shanghai Bank

and any other major shareholder, to subscribe

additional capital to the Tunnel Company

in approved proportions to raise its present

capital of £625,000 to £7 million.

In acknowledging Costains' offer the Tunnel

They

Company be referred to these two conditions.

suggestäthat if the loan could be increased to 75% of

the contract value "this would give your tender an

added financial advantage which could be decisive".

/They

NOTHING TO BE WRITTEN IN THIS MARGIN

;

i

1