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6.
After doing sums on envelopes they made the point that you are in effect offering to underwrite loan capital to a total of about £10 million in a £18 million approx. contract. or only about 55%. It was unfair to insist on several guarantees when the guarantors were themselves carrying the deadweight of 45% of the total cost.
7.
I asked for a message to send to you and after an immense amount of quibbling from Kadoorie the formula in my EXPORTCRED No.53 was given to me. The words from "only such time" to the end are entirely his doing, but he carried the Board
reluctantly with him. He emphasised that under the franchise the original shareholders (who have not been given any preferential shares or premium for promoting the project) must put 25% of their holdings on the public market within two years of completion. It is not practicable however to pass on 25% of the guarantee risk to public shareholders. Marden and Clague argued that if things turned out so badly that the guarantee is invoked then it will be impossible to market the shares. If however things turn out well then the shares will be marketed at a premium, but Kadoorie was not to be moved.
8.
Throughout I gained the definite impression that the Board (Kadoorie included) are most sympathetic to Costains but are not willing to give the blanket guarantee suggested in paragraph 3 of telegram No. 649 to Governor.
9.*
I emphasised throughout that I am not your agent and cannot commit you by my personal opinions.
Copies sent to:-
Board of Trade (C.R.E. Dept.)
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# " (General Division)
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Treasury (Gt. George St.) Commonwealth Office
Export Credits Guarantee
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Department
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Mr. J.A.B. Darlington
Mr. R.S. Kinsey
Cablegram Section
Mr. C.C. Lucas
Sir A. Snelling
Mr. C. M. Drukker Mr. Elliott
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