§ Mr. Bowen Wellsasked the Secretary of State for Industry what progress International Computers Ltd. has made since the guarantee of bank facilities was announced in March.
§ Mr. Patrick JenkinIn March the Government agreed to guarantee up to £200 million of bank facilities for ICL. The company has made considerable progress since then. The new management team of Mr. Laidlaw as chairman and Mr. Wilmot as managing director are carrying out determined cost-cutting measures, which they believe will bring about a significant improvement in ICL's506W profitability. I know how deeply they regret the need for major redundancies, but they have concluded that these are essential to secure ICL's long-term future. Messrs Laidlaw and Wilmot have developed an imaginative new product strategy, and have carried out major organisational changes with a number of new appointments to senior management positions. Their achievements have helped to restore the confidence of their customers and the financial community and have established positive targets for ICL's employees. ICL has also reached agreement on important collaborative ventures with the Three Rivers Corporation of America, with the Mitel Corporation of Canada and with Fujitsu of Japan. The collaboration with Fujitsu on mainframe technology is particularly welcome to the Government as a major user of ICL computers.
Following these collaborative agreements and other measures, ICL made representations to the Government and its principal bankers about the need to ensure a smooth transition to normal financial arrangements in the longer term. We have accordingly agreed to extend the two-year term of the Government's guarantee, but on a reducing basis. I have informed ICL's chairman that the guarantee will be reduced to £150 million on 31 March 1983; to £100 million on 31 March 1984; to £50 million on 31 March 1985; and will end on 31 March 1986. I have also informed the chairman that, with this tapered extension of the guarantee in place, the company will have to draw up its corporate plan on the basis that no further Government support of this kind will be forthcoming. Mr. Laidlaw has assured me that this arrangement should be appropriate for the company's needs as it consolidates its recovery. We have advised the European Commission of our intention.
I am pleased to announce that, as in the case of the original two year guarantee, ICL's four principal bankers have agreed to continue to provide a significant level of committed borrowing facilities over and above the sum guaranteed. For the first year of the extension, to the end of March 1984, the level of £70 million which is currently available from them to ICL will be maintained.