1.17 As regards liquidity, NATS' senior management were concerned that the PPP had been set up in July 2001 with minimal working capital. They told us that total working capital available to the group at the outset was nearly £20 million in cash and a working capital facility of £30 million. The total working capital facility available to the group at the outset of the PPP was equivalent to about six weeks cash costs, and further money could be made available from other parts of the group to the regulated business, NATS (En Route) Plc (Figure 1). After September 11th the company's access to the £30 million bank working capital facility established through the PPP was barred. Senior management's immediate concern was that the Company might run out of cash early in 2002, triggering insolvency proceedings. Because of these concerns, an interim working capital facility was extended jointly by the Government and the banks as a short-term measure to ensure liquidity, though the facility was never drawn.
1.18 The refinancing package has now established a much stronger buffer of liquid reserves for NATS (En Route) Plc. These comprise:
■ A Standby Facility of £16.2 million, funded by NATS' banks;
■ A Liquidity Reserve Account of £21.3 million, primarily funded by a loan from NATS' unregulated business;
■ A Debt Service Reserve Account of £29 million, primarily funded by banks but incorporating a loan from NATS' unregulated business; and
■ Reinstatement of the £30 million bank working capital facility.