Wolverhampton Industrial Engines Ltd.

HC Deb 22 October 1976 vol 917 cc582-3W

Mr. Gwilym Roberts

asked the Secretary of State for Industry if he will make a statement on the present position at the Norton Villiers factory in Wolverhampton.

Mr. Alan Williams

The Government have offered up to £200,000 of assistance on a once-for-all basis under Section 8 of the Industry Act 1972 to a new company, Wolverhampton Industrial Engines Ltd., as a contribution to the cost of acquiring from the liquidator to Norton Villiers Ltd. the business of manufacturing Villiers industrial petrol engines and such parts of the Wolverhampton factory and its plant and machinery as are necessary and of continuing the manufacture there and sale of Villiers engines.

Assistance has been offered in the form of a loan of up to £195,000 and a subscription of £5,000 for non-voting shares in the company. The loan, which will be unsecured, will be at the broadly commercial interest rate of 13½ per cent. per annum, and will be repaid between 31st December 1981 and 31st December 1984. The first two years of the loan will be interest free. The Government assistance will be matched by an equal contribution, in the form of equity subscription, from private sources, including a leading City institution. The compnay will also obtain necessary overdraft facilities on normal banking terms.

The Government's offer is conditional on the provision of satisfactory evidence that the finance required, other than the Government contribution, has been obtained; that arrangements have been reached with the liquidator to Norton Villiers Ltd. for the purchase of the appropriate assets; that a chairman and board of directors has been appointed; that an agreement has been concluded between management and employees on the conduct of industrial relations in the company; and that the company will be free to carry on business without impediment from any other company.

The new company is expected to employ about 100 at the start, rising to about 200 in due course.

With this assistance Villiers petrol engines, the only such engines made in this country for the general industrial market, would continue to be made here, benefitting the balance of payments and providing employment at Wolverhampton.

The responsibility for the former motor cycle business of Norton Villiers Ltd. remains with the liquidator to that company.