§ Mr. Heddleasked the Secretary of State for Industry whether Triumph Motor Cycles (Meriden) Ltd. has met the terms of its agreement with the Export Credit Guarantee Department; and if so, whether his Department will now write off its loan and accrued interest, as announced last September.
§ Mr. TebbitThe agreement with ECGD was for the sale of motorcycles financed by Meriden's bank with ECGD support which were stockpiled in the United States and Australia. The sale was to be completed by 31 May 1981 and it was estimated that £1.95 million would be raised for ECGD. In the event, the target has not been met although substantial progress has been made and £1.05 million has been paid to the ECGD by 31 May 1981.
A number of factors have adversely affected this plan. The recession has depressed sales of motorcycles in the United States and stimulated price cutting, and the weakness of the yen has made competition with the dominant Japanese manufacturers more difficult. The strength of sterling during most of the period of sale has affected the return in sterling from US sales. The result of the adverse conditions is that there has been a shortfall both in the number of machines sold and in sales revenue per machine.
In the light of these difficulties the Government have relaxed the requirements of the agreement and has now agreed to write off the company's loan from the Department of Industry, together with accrued interest if a total of at least £1.3 million is raised for the ECGD by 30 April 1982. On the target being met, the ECGD has agreed as before that it will release Meriden from its obligations to repay to the ECGD the difference between the sterling amount advanced by the bank and that realised from the sale of the stockpile of motorcycles.
This arrangement does not commit new financial assistance to Meriden from either the ECGD or the Department of Industry; nor does it prejudice further ECGD recoveries if events made these possible.