Ha HKD
на
C
114
NO COPIES MADE
OUT TO HONG KONG TELNO EXCED 65 10/4
UNIT 12
MW HIBBEARD
T RECTIVED IN [ARCHIVES NO.31
14 AFK 1903
24/4
CONFIDENTIAL
2.
HANNAM FROM MANN.
TUNNEL,
1. YOUR LETTER TO COTTER ILL OF 1ST APRIL ARRIVED YESTERDAY.
WE HAVE HAD TWO MEETINGS WITH TUNNEL COMPANY. THE FIRST ON 8TH APRIL WAS EXPLORATORY BETWEEN BROTHERS, WARBURTON CHUTCHISON'S), COTTER ILL AND MYSELF. ON 9TH APRIL WE HAD A FULL MEETING WITH SIR ANTHONY PERCIVAL IN THE CHAIR. AMONG 24 PEOPLE PRESENT WERE THOSE NAMED IN YOUR EXCED AND REPRESENTATIVES OF LLOYDS BANK, COSTAIN, HONGSHAI BOTH CONSULTING ENGINEERS AND LEGAL ADVISERS.
3.
SOME PROGRESS WAS MADE:-
(A) WORDING OF POLITICAL EXCLUSION WAS REFERRED TO LAWYERS: (B) WE SUGGESTED NOM INAL CAPITAL OF KWONG WAN, ORIGINALLY DESIGNED TO PROVIDE INVESTMENT BUT NOT GUARANTEES, SHOULD BE DOUBLED C THE EXCESS BEING CALLED ONLY WHEN NECESSARY TO MEET GUARANTEE OBLIGATION)
(C) WE PRODUCED FIGURES OF PROFITABILITY TO DEMONSTRATE THAT 1967 TRUST FUND FORMULA WAS QUITE INADEQUATE IN 1969 CONDITIONS AND INVITED TUNNEL COMPANY TO PUT FORWARD IMPROVED PROPOSAL: CDD
TUNNEL COMP ANY ACCEPTED LLOYDS INTERPRETATION OF LIEN AS A DEBENTURE INCORPORATING A FLOATING CHARGE OVER THE COMPANY REVENUES AND A MORTGAGE ON THEIR ASSETS, AND GIVING LLOYDS POWER IN EVENT OF DEFAULT TO APPOINT A RECEIVER: PROVIDED PROBLEMS OF AD VALORUM STAMP DUTY CAN BE OVERCOME: (E)
WE ARE CONSIDERING WAIVING OUR CONDITION THAT CAP ITAL MUST BE FULLY PAID BEFORE LOAN BECOMES AVAILABLE IN EXCHANGE FOR ALTERNATIVE ARRANGEMENTS MAKING CERTAIN CAPITAL WILL BE AVAILABLE
WHEN REQUIRED.
4. A SMALLER MEETING WILL BE HELD THIS AFTERNOON AT WHICH OUT ST AN DING POINTS WILL BE DISCUSSED AND IF TENTATIVE AGREEMENT
IS REACHED WILL LEAD ON TO DRAFTING LETTER OF INTENT FROM LLOYDS TO TUNNEL OUTLINING THE MAIN SECURITY CONDITIONS OF A FINANCIAL AGREEMENT.
5.
WE HAVE AGREED WITH TUNNEL COMPANY THAT NO COMMENT** WILL BE REPLY BY EITHER SIDE TO PRESS ENQUIRIES DUR IN G NEGOTIATIONS, BUT POSSIBILITY OF PRESS NOTICE WILL BE CONSIDERED AT THE END. PRESS DO HOWEVER KNOW THAT NEGOTIATIONS HAVE STARTED UNDER SIR ANTHONY'S CHAIRMANSHIP. PLEASE ADOPT SIMILAR LINE AT YOUR EN D.
6. ALTHOUGH THE FOREGOING MAY APPEAR SATISFACTORY, YOU SHOULD NOTE THAT MARDEN'S LETTER TO YOU IS BASED ON INCOMPLETE 1967 NEGOTIATIONS AND COMPLETELY IGNORES YOUR AND COSTAIN'S LETTERS TO CLAGUE BOTH DATED 31ST JANUARY SETTING OUT OUR INTENTIONS FOR NEW NEGOTIATION S. SO FAR TUNNEL HAVE TAKEN A POLITE BUT UNCOMPROMISING STAND AGAINST ANY CHANCE IN MARDEN'S LETTER.
7.
FOREGOING IS FOR YOUR OWN INFORMATION ONLY AT PRESENT.
I WILL KEEP YOU INFORMED AS REQUESTED OF DEVELOPMENTS AND TEXT OF ANY PRESS RELEASE OR OUTLINE OF ANY PRESS CONFERENCE. MANY THANKS FOR GOOD WISHES,
S
然
STEWART