Memorandum submitted by Ernst & Young
(TYP 60)
Having reviewed our notes of our appearance
before the Transport Sub-committee on the afternoon of 6 February
2002, we thought it opportune to clarify one of the issues raised.
We were asked how much of the Company's funding
requirement would be privately financed and replied that none
of it would. This is currently the case.
However, we are in the process of preparing
to procure commercial bank facilities, to be guaranteed by the
Secretary of State for Transport, Local Government and the Regions
("the Secretary of State"), to replace the existing
loan financing from the Secretary of State and to provide financing
for the six months following 31 March 2002, in accordance with
the terms of the loan agreement between ourselves, the Secretary
of State and Railtrack PLC. The achievement of this refinancing
is dependant on the terms of State Aid approval and the commercial
terms imposed by the banks.
Whilst it would not be correct at this point
in time to assume that private funding will be available, I felt
it appropriate to ensure that the Sub-committee were aware of
the refinancing activity in the light of the question asked.
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