(1)The aggregate amount outstanding in respect of the principal of the relevant borrowing of a group to which a successor company belongs shall not, at any time when the company is wholly owned by the Crown, exceed £1,400 million or such greater sum, not exceeding £1,800 million, as the Secretary of State may specify by order made by statutory instrument.
(2)The power to make an order under subsection (1) above shall include power to specify different amounts in relation to different groups; and no order shall be made under that subsection unless a draft of the order has been laid before the House of Commons and has been approved by a resolution of that House.
(3)If articles of association of a successor company or of such a company’s nominated holding company confer on the Secretary of State powers exercisable with the consent of the Treasury for, or in connection with, restricting the sums of money which may be borrowed or raised during any period by the group to which that company belongs, those powers shall be exercisable in the national interest notwithstanding any rule of law and the provisions of any enactment.
(4)For the purposes of subsection (3) above an alteration of the articles of association of a successor company or of such a company’s nominated holding company shall be disregarded if the alteration—
(a)has the effect of conferring or extending any such power as is mentioned in that subsection; and
(b)is made at a time when that company has ceased to be wholly owned by the Crown.
(5)In this section—
“group”, in relation to a successor company, means that company’s nominated holding company and all of the nominated holding company’s subsidiaries (including the successor company and its subsidiaries) taken together; and
“relevant borrowing”, in relation to a group to which a successor company belongs, means—
(a)such loans made or treated as made to any company in the group, including loans treated by virtue of the issue of debentures in pursuance of this Act as having been made to any such company, as are not loans made or treated as made by one company belonging to the group to another such company; and
(b)any sums borrowed or treated as borrowed by local authorities in respect of the repayment of which, or the payment of interest on which, the successor company is required to make contributions by virtue of the transfer of any liability in accordance with a scheme under Schedule 2 to this Act.
(6)Where any amount outstanding in respect of the principal of any relevant borrowing of a group—
(a)is treated as repaid or extinguished in connection with the issue of any securities of a company belonging to that group; or
(b)would fall to be so treated, in the case of an extinguishment under section 86 above, if the Secretary of State had given a direction under subsection (3) of that section,
that amount shall be deemed for the purposes of this section to continue to be outstanding except to the extent that any amount payable by the company by reason of the issue of securities in connection with the repayment or extinguishment itself falls to be treated for the purposes of this section as an amount outstanding in respect of the principal of any relevant borrowing of the group.