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Buyouts

Volume 114: debated on Thursday 23 April 1987

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asked the Secretary of State for Transport whether, when a local management buyout is being contemplated for a National Bus Council subsidiary, it will be possible for a mortgage charge to be accepted in support of the payment.

Those who provide finance for buyouts will form their own judgments on what security they need for their loans, and neither the National Bus Company nor the Government have any objection to a subsidiary's assets being mortgaged for that purpose. Moreover, where bids for National Bus Company subsidiaries, whether from managers or third parties, do not reflect the possible alternative use value of property, the NBC is prepared to consider selling the subsidiary subject to a mortgage charge under which further proceeds become due only if the property is resold or developed.