§ Mr. SalmondTo ask the Secretary of State for Scotland if he will give details of the cost incurred in debt write-off for the electricity generating and distribution companies prior to privatisation; and what percentage of the total debt this is.
§ Mr. Allan StewartIn reconstructing the companies' balance sheets prior to flotation, outstanding NLF' loans amounting to £1.044 billion were extinguished in Scottish Hydro-Electric plc and ScottishPower plc. Subsequently the Government injected new long-term debt totalling £516 million into the companies, together with a short-term debenture of £110 million. At the same time, all outstanding tax losses available to the companies were removed.
The difference between loans written off and debentures issued is £418 million. This represents 40 per cent. of the total amount of NLF loans extinguished. The Government expect that this sum will be more than offset by the proceeds of sale of the two companies, which will reflect their new capital structure.