4.12 During the course of the project, the Lenders, Abbey and Bank of America, restructured their businesses, which included, in both cases, independent decisions to exit the UK's project finance market. Both wanted to dispose of their assets in this business area, which included their loans to Laser. Given the precarious state of Laser and the Department's declared reluctance to change the contract, the Lenders stated that they were considering selling the debt at a discount in the secondary debt market. This statement may have been intended to lever concessions from the Department, by playing on fears about dealing with potentially more aggressive debt holders.
4.13 In assessing the termination sum, the Department might have sought professional advice as to the market value of Laser's impaired debt held by the Lenders. This advice may have provided the Department with a better understanding of the Lenders' negotiating position. The Department might then have had a clearer view as to how far it could push its own negotiating position on the termination sum to the lower end of its range of outcomes.