§ Mr. Tebbitasked the Secretary of State for Trade and Industry if he can now make a statement on the negotiations between the receiver and Rolls-Royce (1971) Ltd. on the price to be paid by the latter for the assets they acquired from Rolls-Royce Ltd.
§ Mr. Michael HeseltineRolls-Royce (1971) Limited and the receiver and joint liquidators of Rolls-Royce Limited are today announcing that a settlement has been reached covering the price to be paid for the gas turbine business acquired by Rolls-Royce (1971) Limited under the heads of agreement dated 17th March 1971. The settlement, to which the Government are a party, incorporates the resolution of a large number of other claims and ancillary matters outstanding between the receiver and joint liquidators on the one hand and Rolls-Royce (1971) Limited and the Government on the other.
The settlement provides for the payment to the receiver of an overall consideration of £87½ million, of which £30 million has already been paid on account of assets and undertakings transferred. Interest will be payable on the balance, and the sums due reduced by the sterling equivalent of $21 million in respect of advance payments on the RB211 will be paid to the receiver by Rolls-Royce (1971) Limited on or before 23rd July. I am placing a copy of the agreement with minor omissions for reasons of commercial confidentiality in the Library.
The settlement has been notified to Mr. W. E. Parker, CBE, FCA, the independent expert appointed to determine the price payable under the heads of agreement, and also to Mr. Justice Bagnall, to whom certain points of law were referred at the beginning of the hearing. The expert has made the following statement to the parties:
Mr. Justice Bagnall and I are both of the view that it is not only in the public interest, but greatly to the benefit of all those directly concerned, that this comprehensive settlement should have been reached now and by negotiation; the alternative of litigation, including the continuation to completion of the present Hearing, would have involved heavy costs in both time and money and a further delay of many months.345WSo far as the Agreement relates to the substantial issue with which I have been concerned, namely the price payable under the heads of agreement when construed in accordance with the decisions of Mr. Justice Bagnall, I am of the opinion, on the extensive material which has been made available to me, that the conclusion reached is reasonable and fair to both sides.Under the heads of agreement the Government are to provide any money necessary to enable Rolls-Royce (1971) to pay the receiver. I am discussing with the company urgently the manner and extent of this funding, and I will inform the House of the outcome. Token provision only has been made in the main Estimates, and, pending parliamentary approval of those Estimates and the presentation of a Supplementary Estimate later in the year, advances may need to be made from the Contingencies Fund.I am sure the House will welcome not only the conclusion of an agreement satisfactory to the parties on the price to be paid for the transfer of assets but also the resolution of many other outstanding issues. This settlement will enable the receiver and joint liquidators to make substantial progress towards the completion of their task, and the management of Rolls-Royce (1971) to concentrate on developing the position of the company as one of the world's leading manufacturers of aero-engines.