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CONFIDENTIAL
less.
The present amount at risk on Hong Kong is estimated to be
£1.2bn and on China £1.4bn.
26. If both markets were to default indefinitely from today, ECGD's loss would be the total outstanding plus an unquantifiable amount in respect of the cost of work carried out but not yet drawn from the loans or delivered ie the pre credit risk. The total liability could not exceed the theoretical maximum liability and would probably be much less.
27. On Hong Kong the bulk of ECGD's current exposure is due to be repaid by 1997 (approximately 80%). Assuming that the present commitments are converted to guarantees, all related goods are delivered or loans fully drawn by 1997, and little additional
business is secured the amount at risk in 1997 could be in the
region of £1.8 billion.
28. On China repayments come in over a longer period and by 1997 £1.2 billion could still be at risk, assuming little in the way of additional business in the interim.
some
£27 billion.
29. ECGD's total exposure in all markets at present is around Thus combined exposure to China and Hong Kong is about 10 per cent. This could increase significantly if some further large projects go ahead.
Conclusions
31. In other
sectors, a number of large UK companies have big
commitments in Hong Kong, though much of the project work will be covered by ECGD. More analysis needs to be done of the impact on those companies which are highly dependant on Hong Kong operations
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