20
CONFIDENTIAL
3
Speaking Notes
Following the dinner, the delegation will expect Mr Rees to make a short speech. At Annex C are some outline speaking notes.
Background
CLOSE Banakakasan szolg
Ir Rees is familiar with the Guangdong project but he may wish to refresh his
memorary on one or two points. A background note on the project is at
Annex D.
For his own information, Mr Rees might like to note that the Chinese may be
looking to the UK to put a specific financing offer on the table in terms of an ECGD loan. We consider that we cannot put anything on the table until ve
have answers to the fundamental questions which remain unresolved on the timing of the project, the nuclear partner, and the underlying financial
structure envisaged for the project.
The Feasibility Study on the project envisaged a Hong Kong nuclear investment company (in which CLP would have a major holding) taking 40% of the equity in the project. The Study envisaged the GPC would take the remaining 60% of the equity, but the Bank of China would provide guarantees to creditors only in proportion to this 60% holding of the equity. It is evident from private dis- cussions with Mr Stones that the consequences of this proposed financial
structure have not been thought through in terms of the liabilities which CLP and other investors in the Hong Kong Nuclear Investment Company would incur.
In the official level discussions on Monday and Tuesday, preceding Mr Rees'
dinner, officials will be raising some of these unpalatable issues on share- holders responsibilities and guarantees. Should it prove necessary, we will
seck to brief Mr Rees specifically on the outcome of these discussions.
If these issues are raised at the dinner, Mr Rees will wish to say that these are complex matters which require further consideration but in principle it is most unlikely that the UK Government would itself contemplate putting equity
No comments yet.
Private notes are available after approval.