WOULD BE UNACCEPTABLE.
•
NEGATIVE PLEDGE.
5. EC G D BELIEVE IT WOULD BE WRONG FOR THEM TO ACCEPT A
"NON CURED POSITION WHILE C L P WERE ALLOWED TO GIVE SECURITY TO "NON-CURED
OTHER LENDERS.
6. DEWE-MATTHEWS WAS UNCERTAIN WHETHER C L P WOULD ACCEPT WHAT HE AGREED WAS A VERY REASONABLE E C G D POSITION BECAUSE OF KADOOR IE'S EMOTIONAL (RATHER THAN RATIONAL) OPPOSITION TO THE IDEA OF GIVING MORTGAGES AGAINST THEIR PROPERTY. HE AGREED THAT A NEGATIVE PLEDGE ON ALL ASSETS WOULD IN FACT STRENGTHEN THEIR POSITION FOR FUTURE BORROWING.
7. LIPPITT SUGGESTED THIS MIGHT BE DISCUSSED INITIALLY AT A LOWER LEVEL (I E WITH SIR SIDNEY NOT SIR LAWRENCE) WITH PRINCIPALS COMING IN AT ABOUT THE THIRD/FOURTH DAY.
8. THIS NEGATIVE PLEDGE WOULD NOT UNDULY RESTRICT C L P'S SHORT-TERM BORROWING FOR WORKING CAPITAL OR FOR LAND PURCHASE.
9. IT WAS AGREED WE COULD EXPECT SECURITY TO BE NEGOTIATED TO A SUCCESSFUL CONCLUSION WITHOUT REAL DIFFICULTY AS LONG AS BOTH SIDES CONTINUED TO BE REASONABLE.
10. DEWE-MATTHEWS THEN LEFT.
FOREIGN CONTENT.
11. TREASURY HAVE AGREED TO ALLOW £13.4M OF FOREIGN GOODS, AS PER MY INDUS 272. (PLEASE NOTE IN PARA 2, ITALIAN PRICE FOR STEEL SHOULD READ £5.9M AND SPANISH PRICE £5.5M). THESE AMOUNTS WOULD STILL
ATTRACT 15% LOCAL COST SUPPORT.
PRICES.
12. IT IS CLEAR FROM HAVELOCK'S TELEXES AND FROM HIS CONVERSATION WITH LIPPITT DURING MEETING THAT WE MUST BE LOOKING FOR £10-15M PRICE REDUCTIONS (ALTHOUGH IT WILL BE A QUESTION OF JUDGEMENT AS TO WHEN WE PUT REDUCTIONS ON THE TABLE) IF LIPPITT IS TO COME OUT AS PLANNED (WHICH HE IS STRONGLY INCLINED TO DO). WE WILL BE MEETING WITH TEAM LEADERS ON MONDAY AND SPELLING HOW MUCH WE'RE LOOKING FOR. ON TUESDAY LIPPITT EXPECTS TO SEE SENIOR MANAGEMENT OF MAIN CONTRACTORS (AS SET OUT IN HAVELOCK'S INDUS 172). HE WILL THEN APPLY SQUEEZE.
LIPPITT'S VISIT.
13. SUBJECT TO HAVELOCK'S ADVICE ON LIKELY SUCCESS OF A SQUEEZE AND