Publication - FOI/EIR release

Investment returns for Government business interventions: FOI release

Information request and response under the Freedom of Information (Scotland) Act 2002

Published:
11 Aug 2020
Investment returns for Government business interventions: FOI release
FOI reference: FOI/202000055209
Date received: 2 Jul 2020
Date responded: 22 Jul 2020
Information requested

“For each of the government business interventions in Prestwick Airport, Ferguson Marine, Bifab and Lochaber Aluminium smelter please can you give me the investment returns actually received by the government in each of the fiscal years 2017/18, 2018/19 and 2019/20. For each can you give me the nature of the return - interest income, dividends or other (please state). If any of the years requested predate the government intervention then please mark 'N/A' for that year. Please do not hesitate to contact me if you need any clarification.”

Response

I can confirm that the actual investment returns received from Prestwick Airport over the three years in question is zero.

The Scottish Government provided two commercial loans to Ferguson Marine Engineering Limited (FMEL) between September 2017 and June 2018 totalling £45 million. FMEL was put into administration in August 2019 and information on the interest accrued and interest paid on the loans can be found in this previous FOI release https://www.gov.scot/publications/foi-201900004910/.

Investment returns received by the Scottish Government in relation to the Lochaber Guarantee, which concerns the power purchase obligations of the aluminium smelter at Fort William, are in the form of guarantee fees paid by the business. For reasons of commercial confidentiality we cannot publish details of the investment returns across the requested fiscal years, we have exempt information under section 33 of FOISA. (Further information regarding this section can be found in Annex A). However the total discounted value of the fee premiums across the lifetime of the guarantee is £18.7m as stated in the Scottish Government’s Consolidated Accounts (https://www.gov.scot/publications/scottish-government-consolidated-accounts-year-ended-31-march-2018/pages/18/).

In 2017/18, the Scottish Government advanced loan funds of £19 million to Burntisland Fabrications Limited (BiFab). This was converted to a 19.9% equity stake in BiFab on 17 April 2018.

In 2018/19, further loan monies were advanced to BiFab (£18.4 million) and were converted to equity on receipt of funds by BiFab (12.5%). A total of £37.4 million was advanced under the original loan facility, which was converted to a 32.4% equity stake. This remains the equity stake held by the Scottish Government as at 9 July 2020. No dividends have been received.

In 2019/20 the Scottish Government advanced £9 million to BiFab under a separate, non-convertible loan facility. Interest accrued on sums advanced at a commercial rate of interest of 18% per year and the exact interest outstanding to the Scottish Government as at 31 March 2020 will be disclosed in SG’s next set of annual accounts (the process for which is currently being finalised and reviewed by SG’s auditors, Audit Scotland).
Please be advised that under Section 33 of FOISA some information relating to Bifab has been omitted from this release and further information regarding this exemption can be found in Annex B.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

Contact

Please quote the FOI reference
Central Enquiry Unit
Email: ceu@gov.scot
Phone: 0300 244 4000

The Scottish Government
St Andrews House
Regent Road
Edinburgh
EH1 3DG