HC Deb 14 January 1977 vol 923 cc632-3W
Mr. Grylls

asked the Secretary of State for Industry what is the total financial support being offered to John Hastie Company of Greenock; what proportion of the total equity the Government will hold; what loans are to be made to the company; and what are the conditions of the loans.

Mr. Kaufman

Normally it is the Department's practice to publish information about selective financial assistance in the first quarter after the first payment is made. However, in the circumstances of this case, I am glad to provide the following information now. Following the appointment of the Receiver, my Department initiated negotiations with the object of preserving in Greenock the important Hastie capability for the manufacture of large steering gears. My Department has offered Vickers Ltd. support for this purpose not exceeding £2.23 million under Section 7 of the Industry Act 1972. Vickers Ltd. has accepted this offer. The issued share capital of the new company, John Hastie of Greenock (Holdings) Ltd., will be £850,000, of which £500,000 will be held by Vickers Ltd. and £350,000 by the Secretary of State for Industry. All shares participate in the profits of the company. The shares held by the Secretary of State are redeemable and have no votes. The shares held by Vickers Ltd. have voting rights. My Department will make available two loans to John Hastie of Greenock (Holdings) Ltd.

The first, of £100,000, repayable in three equal instalments on 31st December 1981, 1982 and 1983, interest-free for three years and thereafter bearing interest at 12 per cent. per annum, is to assist in the acquisition of the business of John Hastie and Co. Ltd. The second is a loan facility for £600,000, for the re-equipment and modernisation of the company's plant and buildings at Greenock, it will be available only if, as I hope, Vickers decides before 31st December 1980 to go ahead with modernisation. The terms of the loan provide for repayment in three equal annual instalments following the fifth, sixth and seventh anniversaries of the advance. It would be interest free for two years and thereafter bear interest at 12 per cent. per annum. The balance of the assistance is primarily for product development. In addition, my Department has provided an indemnity to the Receiver personally and to Vickers in respect of contingent liabilities should any arise out of the completion of certain residual business of the former Hastie Company.