TNAG-0845-FCO40-1055-Visits-of-Foreign-and-Commonwealth-officials-to-Hong-Kong-1979 — Page 123

CONFIDENTIAL

VISIT BY MR PETER BLAKER MP TO HONG KONG: 23-25 SEPTEMBER 1979

CABLE AND WIRELESS

Points to Make

1.

(Defensive and only if matter is raised by the Governor of

Hong Kong or his Financial Secretary, Mr Haddon-Cave.) In strict

confidence, HMG is continuing to give urgent consideration to the

sale of shares in Cable and Wireless. If there is a decision in

principle to go ahead, it is expected that DOI will shortly wish

to take up the Governor's offer to send a team to UK for further

detailed discussions.

2. (If Cable and Wireless is raised by anyone else.) HMG is

reviewing its public assets generally, but there are at the

moment no plans to sell shares in Cable and Wireless.

Essential Facts

3. Cable and Wireless is wholly owned by the Governoteat. It oper-

ates almost entirely overseas in international communications

services under franchises granted by the governments of countries

for which the services are provided. The two most profitable

franchises are Hong Kong and Bahrain, the first of which is the

major element in the company's profitability.

4. HMG is at present considering the sale of shares in Cable and

Wireless. Two merchant banks were consulted independently by the

Secretary of State for Industry about the possible sale of shares

and advised that this would be feasible but only after the satis-

factory negotiation of an extension to the existing Hong Kong

concession (and preferably also after the renewal of the important

concession in Bahrain).

CONFIDENTIAL

15.