TNAG-0766-FCO40-970-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 96

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GR 500

#. K. G.D. (a)

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HKK 164/.

CYPHER CAT A

1978

FM DOT 161705Z

CONFIDENTIAL

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A

TO PRIORITY BTC HONG KONG TELNO INDUS 14 OF 16 JANUARY

YOUR INDUS 6 OF 13 JANUARY: POWER STATION PROJECT.

Jeels

PLEASE PASS FOLLOWING TO SIR LAWRENCE KADOORIE FROM LIPPITT:

NR

*THANK YOU FOR YOUR REPLY OF 13 JANUARY TO THE MESSAGE WHICH

DEREK MARCH PASSED TO YOU.

I CAN ASSURE YOU THAT THE BRITISH CONTRACTORS AND THE DEPARTMENT OF INDUSTRY ARE ANXIOUS TO MEET YOUR WISHES AS FAR AS POSSIBLE. I AM SURE THAT FOR YOUR PART YOU WILL APPRECIATE THAT, AS SCHRODERS HAVE BEEN ACTING AS YOUR FINANCIAL ADVISERS, WE MUST BE CERTAIN THAT THE ARRANGEMENTS WE FOLLOW DO NOT GIVE RISE TO DIFFICULTIES FOR ANY OF THE PARTIES INVOLVED.

IN THE LIGHT OF YOUR MESSAGE I HAVE HAD FURTHER DISCUSSIONS WITH GEC AND ECGD, AND HAVE SPOKEN INFORMALLY TO SCHRODERS. I HOPE YOU WILL AGREE THAT THE FOLLOWING SUBSTITUTIONS FOR

SUB PARAGRAPHS I-V OF MY ORIGINAL TELEX MEET YOUR WISHES AND

ARE THOSE THAT WILL BEST EXPEDITE THE CONTRACT:

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GEC WILL NOW WITHDRAW THE NOMINATION OF LAZARDS AS THE FINANCING BANK AND NOMINATE SCHRODERS ON THE UNDERSTANDING OF COURSE (AS I STATED IN MY EARLIER TELEX) THAT THE COST OF EMPLOYING SCHRODERS WILL BE FOR THE BUYERS' ACCOUNT:

COMMENT: SCHRODERS WILL BE ASKED TO SIGN A DECLARATION TO THE EFFECT THAT THEIR LOYALTIES WILL BE TO ECGD AND THE

LENDING SYNDICATE AND NOT TO THE BUYER. I UNDERSTAND THAT

THIS WILL NOT PRESENT THEM WITH ANY DIFFICULTY:

ECGD WILL PRODUCE THE FIRST DRAFT OF THE LOAN AGREEMENT. SCHRODERS WILL BE INVOLVED AS LENDERS IN THE NORMAL WAY

AS SOON AS PRACTICABLE AND WILL HAVE EVERY OPPORTUNITY TO COMMENT ON THE DRAFT DOCUMENT.

COMMENT: ECGD HAVE OF COURSE ALREADY BEEN WORKING ON THE