Mr. loan Evansasked the Secretary of State for Transport whether W. & C. French (Construction) Ltd. has now repaid all amounts due under the arrangement whereby it was given financial assistance to complete his Department's trunk road contracts.
§ Mr. William Rodgers:Yes. Under the arrangements anounced on 22nd May 1975 the Government undertook to make an ex-gratia payment to W. & C. French (Construction) Ltd., of £9.5 million and additionally to make available a loan of up to a maximum of £4.5 million. If the total loss on the contracts was less than the forecast loss, the company undertook to repay half the difference. The Department's independent accountants have stated that in their opinion no repayment on this account is likely. Apart from some outstanding claims still to he settled, the aggregate losses on the contracts exceed the forecast loss by over £5 million.
The company drew £1.5 million of the £4.5 million loan facility. This amount would have been repayable in six equal instalments beginning in September 1977, but at the company's request the Department agreed to allow early repayment of the loan, either in whole or by instalments, for an additional lump sum premium of 9 per cent. This negotiated settlement also provided that, prior to September 1978, the Department would not exercise its rights to convert any outstanding amounts of the loan into equity. In the event, the company repaid the whole of the loan, together with the premium of £135,000, on 12th August 1977.