§ Mr. Joel Barnettasked the Secretary of State for Trade and Industry (1) what discussions he has had with the directors of Govan Shipbuilders Limited as to the amount of their issued share capital; and if he will make a statement;
(2) how much of the proposed loan to Govan Shipbuilders Limited has been paid to date; and when it is expected the total will be paid;
(3) what conditions he attached to the loan granted to Govan Shipbuilders Limited, in particular what consideration he gave to introducing the money by way of equity capital or a convertible debenture; and if he will make a statement.
§ Mr. ChatawayGovernment investment in the company will take the four forms recommended by the Hill Samuel Report: equity to cover the purchase of fixed assets, long-term loans to provide working capital, and grants to cover contractual losses; these three sources will be supplemented by a Government guaranteed bank overdraft to meet day to day requirements. The exact proportions of this mix will be decided in the light of the company's final capital structure which is still under consideration. To cover the company's immediate requirements, the Government has purchased £5 million of equity, guaranteed a bank overdraft up to a maximum of £2 million, and is negotiating a long-term loan to provide working capital.
§ Mr. Joel Barnettasked the Secretary of State for Trade and Industry how frequently he receives financial reports from Govan Shipbuilders Limited; whether such reports indicate that progress is generally in line with the advice he had previously been given; and if he will make a statement.
§ Mr. ChatawayAs promised in the statement made by my right hon. Friend to the House on 28th February, we are currently holding detailed negotiations with the company on monitoring arrangements. A long-term profit and loss forecast to be rolled forward annually will 17W be produced and this will be supplemented by quarterly profit and loss statements against which the accuracy of the long-term forecast can be checked. We will also receive yard contract summaries showing actual costs of construction of ships against estimated stage costs and fixed prices; periodic cash flow statements; and quarterly and annual balance sheets. In addition to financial monitoring, we are discussing with the company checks on its development using the Maynard Report for reference.
§ Mr. Joel Barnettasked the Secretary of State for Trade and Industry what plans he has for Government directors on the Board of Govan Shipbuilders Limited; and if he will make a statement.
§ Mr. ChatawayAs sole shareholder, the Government has full control of the company and approves all appointments to the board of directors.