§ Mr. William Hamilton
asked the Minister of Power if he will make a statement on the continued inability of the steel firm of Colvilles Ltd. to pay the interest on the loan granted to them for the establishment of the steel strip mill in Scotland; and what steps he intends to take to expedite payment.38W
§ Mr. Frederick Lee
Colvilles have the right under the Loan Agreement to postpone payments of interest accruing up to three years from the production date for the new works, that is until 1st May, 1966. The company exercised this right in respect of £4½ million of interest falling due in 1962 and 1963. In June, 1964, the company stated that a start would be made on the repayment of the postponed interest and in September £2½ million of the sum previously postponed was repaid. The company exercised the right to postpone the payment of the £3 million falling due this year and the total of postponed interest now outstanding is £5 million.
The company informed my Department in July, 1964, that it was their hope that if the trading conditions then prevailing were maintained, they would make a further repayment of postponed interest during 1965. They expected that all postponed interest would be repaid by May, 1966.
Interest is charged on postponed interest and has been paid regularly by the company. Under the terms of the Agreement there is no obligation to repay postponed interest until the whole amount outstanding is repaid in 1978.