By Philip Dver
British Leyland Motor Corporation is to make an immediate repayment to the Government of £20m of the outstanding £35m loans made available to the group by the Industrial Reorganization Corporation. In addition the terms of the remaining commitment are being restructured.
According to an official announcement from the Department of Trade and Industry the £20m is part of a £25m loan made by the IRC on August 5, 1968. The agreement also provides for the terms of the remaining £5m of this loan to be varied so that it will rank as an unsecured loan carrying an interest rate of 7-5 per cent per annum and repayable on May 31, 1977.
The existing fully drawn from revolving facility which was granted to the motor manufacturer on June 1st. 1970 at a current average interest rate of 5-32 per cent is to be replaced by a fixed term unsecured loan repayable on Mav 31 1982; but the interest rate will be reduced to 7-4 per cent. A major repayment to the Government has been expected following the £51m rights issue earlier this year and a lower stock position which should result in reduced finance charges in the current term.
N. M. Rothschild & Sons, merchant bankers, acted as advisers to the Secretary of State in the negotiations.