§ Mr. CoeTo ask the President of the Board of Trade if he will make a statement about his Department's loans to Carnon Holdings Ltd.
§ Mr. HeseltineI have today agreed to a conditional waiver of repayment of my Department's loans outstanding to Carnon Holdings Ltd.
Two loans were extended to the company, in 1986 and 1988, totalling £23.4 million, to safeguard employment at the company's South Crofty tin mine. When the loans were offered, independent forecasters were expecting that the tin price would recover; this would have permitted Carnon to trade profitably and hence repay the loans. However, the continuing low price of tin has meant that there is no longer any realistic prospect of repayment.
The waiving of repayment of the loans is dependent on two conditions: that the company succeeds, by the closing date of 4 August, in raising the "minimum subscription" set out in its prospectus to be published on 30 June; and that the House of Commons does not object to this waiver before the closing date.
The waiving of the debts is intended to permit Carnon the opportunity to raise fresh funding to continue its operations but my decision is not intended to imply any comment on or endorsement of the company's financial standing or position. Any potential investor must form his or her own judgment of the merits of investing on the basis of information supplied by Carnon.