The_Open_Door_deel1

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during this three-year period. In 1965 a re-scheduling agreement
with certain creditors became unavoidable and for this purpose
a Memorandum of Agreement was signed on February 11 of that
year. Christie, who made an (additional) loan of $ 0.7 million
during the stand-by period when the first signs of financial
difficulties were noted, agreed to subordinate his previous
loans, amounting to nearly $ 1.9 million and with interest rates
averaging less than 5?, to all other creditors (118), while his
$ 0.7 million loan was included in the Rescheduled Indebtedness.
The use of Bomi Hills ore to upgrade the Mano River ore and the
expected closing down of L.M.C. in the 1970's induced N.I.O.C.
in 1968, to initiate a new investment programme "Mano II".
To finance this expansion programme new loans were sought and
subsequently over $ 5.3 million long-term credits were attracted.
Among the banks that provided loans were the Bankers Trust
Company and the Export-Import Bank (both from the U.S.A.). The
obtaining of these loans had been facilitated by the Christie
Estate which had agreed to accept a further postponement of the
amortization of Its $1.9 million loan to N.I.O.C., already
subordinated in 1965 (119). However, in 1974 N.I.O.C. failed,
both the amortization of the newly attracted loans and the
liquidation of the Rescheduled Indebtedness of 1965, restructured
its long-term debt again in 1974 but was once more
unable to meet the instalments on its long-term debt in December
1976, Though the company managed to make some repayments in 1977
the financial future looked extremely discouraging at the end of
the year. The company explained the recent financial difficulties
by referring to the harsh conditions of the 1974 Rescheduling
Arrangement and the delay in reaching full production under the
Mano II project, which in its turn had been caused by a badly
designed new plant for beneficiating the ore and by the 1976
rainy season (which indeed had been very bad) which had affected
production and shipments of ore (120),
The Mano II expansion programme had aimed at a production of 5
million tons of fines per year. As can be seen from Annex 13 (see
also Table 11 ) the actual production was much lower and averaged
in the years 1974 through 1977 only 2,2 million (long) tons of
fines (apart from the production of a modest quantity of
siliceous fines and of blast furnace). One of the main causes of
this low production was the plant. This had been designed and
constructed by a foreign company and could not cope with the
required tonnage. In February 1977 legal action was started
against this company,, the Randolph M. Parsons Company, and its
subsidiary, Parson-Jurden Company, for damages arising from the
defective design of the beneficiation plant, and N.I.O.C.
claimed an amount of $ 50 million (121). On December 31, 1977
N.I.O.C,'s long term liabilities totalled $ 8.4 million whereas
its current liabilities as of the same date amounted to S 7.9
million. As can be seen from Table 10, N.I.O.C. owed the
Christie Estate about $ 5.9 million. L.M.C. $ 2.2 million and
U.S. banks $ 6.0 million at the end of 1977.