§ Mr. Nicholls
To ask the Secretary of State for Transport (1) whether he will ensure that the sale of the successor company by a trust port board will be subject to sufficient safeguards to prevent the subsequent reorganisation of the successful bidder's other business in such a manner as to allow any of their debt repayments to be funded by the revenue and profits of the successor company;
(2) what advice he has given to trust port boards to ensure that any successful bid for a trust port does not lead to revenue and reserves being used to fund debt payments for other trading enterprises;
(3) what steps he has taken to ensure that the subsequent actions of a successful bidder for a trust port do not lead to the assets, revenue or profits of the successor company being used to fund debt incurred in another company in which the successful bidder or his backers have a substantial stake;
(4) whether he will require any successful bidder for a trust port to demonstrate that any other company in which he or his backers have any stake does not contain repayment schedules for interest on debt which might in due course prejudice the successful operation of that company.
§ Mr. McLoughlin
The advice given to trust port boards makes it clear that, where trust ports intend to sell their360W undertakings to a single bidder, they are expected to prepare and agree with my right hon. and learned Friend a statement of objectives for the sale. These objectives will include the desirability of encouraging the disposal of the whole or a substantial part of the equity share capital of the successor company to managers or other employees of the company, and the obtaining of the best open market price for the port, taking into account any other agreed objectives, for example plans for the future of the port. In assessing complete bids, trust port boards will clearly wish to satisfy themselves that a bidder is both prepared and able to meet these objectives.
§ Mr. David Shaw
To ask the Secretary of State for Transport (1) whether, in relation to the privatisation of ports, he intends to operate a price preference in favour of bids from management and employee buy-out teams; what discussions have taken place, and are taking place, with potential management and buy-out teams; and if he will make a statement;
(2) what is meant by the term substantial employee share ownership in respect of the current trust ports privatisation programme; and if he will make a statement;
(3) whether it is his policy to support the principle of employee share ownership in the current trust ports privatisation programme; and if he will make a statement.
§ Mr. McLoughlin
Under section 5(3) of the Ports Act 1991 my right hon. and learned Friend is obliged tohave particular regard to the desirability of encouraging the disposal of the whole or a substantial part of the equity share capital of the successor company to—
- (a) managers of other persons employed by the company; or
- (b) another company the whole or a substantial part of whose equity share capital is owned by managers or other persons so employed."
It is for the trust port boards in the first instance to assess the bids for their ports, including those from management and employee buy-out teams, and to put their recommendation as to the successful bidder to my right hon. and learned Friend for his consent. The term "substantial" occurs frequently in legislation and falls to be interpreted in the particular context and circumstances of each case. Each trust port board will need to consider each bid against the overall objectives of sale agreed for its port, including those relating to employee share ownership. My right hon. and learned Friend has made it clear that he is prepared to consider a limited price preference for a management and employee buy-out team in individual cases and in the light of the particular circumstances of each case.