The Public Airport Companies (Capital Finance) Order 1990

Application of Part IV of the Act: additional credit allowance

4.—(1) Where a controlling authority, in accordance with article 2(1)(b), is to be treated as reducing its liabilities in respect of a financial year, Part IV of the Act shall apply as if, but only as if, that authority were entitled to an amount of additional credit allowance equal to the total of the reduction in liabilities for the public airport company and its subsidiaries concerned.

(2) In paragraph (1) above, the reference to a reduction in liabilities for a public airport company or any subsidiary of such a company is a reference to an amount equal to the amount of the reduction in liabilities calculated under article 2(3) above.

(3) Each of the following amounts constitutes for this purpose an amount of additional credit allowance—

(a) an amount by which, in accordance with a determination of the controlling authority, any basic credit approval issued or transferred to that authority is treated as increased; and

(b) a sum which, in accordance with a determination of that authority, is to cease to be set aside as provision for credit liabilities.

(4) Any increase of a basic credit approval, in accordance with paragraph (3)(a) above, shall be treated as taking place, and any amount which is to cease to be set aside, in accordance with paragraph (3)(b) above, shall cease to be set aside, on the last day of the financial year in which the public airport company or subsidiary concerned reduced its liabilities on the relevant date as described in article 2(3) above.

(5) If an amount ceases to be set aside in accordance with paragraph (3)(b) above,

(a) the controlling authority’s credit ceiling shall at that time be increased by an amount equal to the amount ceasing to be set aside; and

(b) an amount shall at that time be deducted from the amount taken into account under section 62(1)(d) of the Act for that authority equal to the amount ceasing to be set aside (and, by virtue of this sub-paragraph, the amount taken into account under section 62(1)(d) may, accordingly, be a negative amount).

(6) Any amount which ceases to be set aside in accordance with paragraph (3)(b) above may be applied by the controlling authority according as it determines for one or more of the purposes described in section 60(2) of the Act and, subject to paragraph (10) below, an amount may be so applied in the financial year referred to in paragraph (4) above or in any later financial year.

(7) An amount which is applied as provision to meet credit liabilities as described in paragraph (6) above may be used as an amount of credit cover for the purposes of section 50 of the Act or article 3 above in accordance with a determination of the controlling authority referring to the credit arrangement or additional liabilities, as the case may be.

(8) Where any amount is applied as described in paragraph (6) above, the amount taken into account under section 62(1)(d) of the Act for the controlling authority shall at that time be increased by an amount equal to the amount so applied.

(9) A determination by a controlling authority under paragraph (3) above shall be made not later than 30th September in the financial year following that in which, in accordance with paragraph (4) above, a basic credit approval is to be treated as increased or an amount ceases to be set aside.

(10) A determination by a controlling authority under paragraph (6) above as to the manner in which any amount is to be applied shall not be made later than 30th September in the financial year following that in which, in accordance with the determination, an amount is to be applied.