Creditors Concerned About Lack of Action, Set Friday Deadline for Progress
LONDON (AP) _ Sixteen creditors of the International Tin Council, concerned about failure to solve a crisis threatening to collapse the metal’s market, have set a Friday deadline for progress, their spokesman said Tuesday.
Delegates from the tin council’s 22 member nations were to meet in London Wednesday to resume talks on bailing out the cash-strapped organization, which supports the world price of tin by buying up surplus on the market.
″Not even this group of banks ... can wait forever,″ said Sir Adam Ridley, a director of London’s Hambros Bank and spokesman for the 14 banks and two metals dealers. The creditors, who have proposed deferring the council’s debts for a year, must have an answer by Friday, he told a news conference in London.
He did not say what would happen if the deadline is not met.
″We seem to be the only players doing anything and with any concrete plans,″ Ridley said. ″Where are the other players and what are they doing?″
The tin council stopped price-supporting purchases Oct. 24 when it ran out of money. Later that day, the London Metal Exchange suspended tin trading. Tin trading remains closed pending the outcome of the tin council’s meeting.
Ridley was expanding on a statement issued Monday in which the creditors said they were willing to defer the tin council’s principal and interest payments for 12 months, providing that the member countries contribute money to the council and guarantee its debts.
Ridley declined to say how much the council owes the creditors he represents, but sources in London said the debts were slightly less than $432 million.
He named the creditors as two metals brokers, the American firm Shearson Lehman Brothers and the West German firm Metallgesellschaft, and 14 banks.
The banks are Arab Banking Corp., Australia and New Zealand Banking Group, Algemene Bank Nederland, Banque Indosuez, Bank Bumiputra Malaysia, Malayan Banking, Arbuthnot Latham, Hambros, Kleinwort Benson, Standard Chartered, Bank of Tokyo, Bangkok Bank, Trustee Savings Bank and Bank of Nova Scotia.
In addition, the tin council is indebted to 14 London Metal Exchange brokers who have bought tin on its behalf. The total debt to them is difficult to quantify, because it will depend on the price of tin when trading on world markets is resumed, traders said.
The tin council has been absorbing surplus tin for three years to meet its obligation of keeping the price of the metal above a minimum of $12,240 per metric ton.
Experts in London predict the price would drop by half if left to fall freely when trading resumes, a dive that could bankrupt some brokers and severely hurt tin-producing countries.
Chances are slight that tin council governments can agree on a rescue operation Wednesday, said delegates who will be attending their meeting.
The meeting was originally scheduled for Nov. 12, following the failure of tin council delegates to agree a rescue plan at an emergency meeting in London last week.
On Friday, the meeting was moved up at the urging of Britain’s trade and industry secretary, Leon Brittan.
Britain is one of the ITC’s 16 consumer members. All European Community countries belong, as well as Canada, Switzerland, Finland, Spain and Japan. The body’s six producer members are Malaysia, Indonesia, Thailand, Australia, Nigeria and Zaire.