HC Deb 14 May 1975 vol 892 cc467-8

1. Ferranti Limited (The Company) will take steps to increase its authorised ordinary share capital so as to enable the following transactions to take place.

2. Her Majesty's Government will subscribe £8⅔ million as ordinary share capital as follows:

£ million
4 million ordinary shares of 50p each £1.50 each 6
2,666,666 non voting ordinary shares of 50p each at £1.00 each 2⅔
£8⅔

This would provide Her Majesty's Government with 50 per cent. of the votes and 62½ per cent. of the total equity.

3. The rights attached to the non-voting ordinary shares would be increased to parity with the voting ordinary shares in the event of a listing being obtained or a marketing being undertaken, or, at the latest, on 1st October 1978.

4. Her Majesty's Government will subscribe £6⅓ million by way of a Loan Stock 1983/87 carrying an appropriate commercial coupon.

5. [This clause deals with the Company's bank borrowing limits, and contains commercially confidential figures].

6. Guarantees by Her Majesty's Government in respect of bank borowings and bid and performance bonds will be withdrawn.

7. The management structure will be as agreed in correspondence between the Company and Her Majesty's Government.

8. The future dividend policy of the Company will be one appropriate to a publicly quoted company of similar character.

9. Appropriate warranties will be agreed between the Company and Her Majesty's Government.

10. In the event of the Company's advisers arranging a marketing or listing of Ferranti shares at a price in excess of £1.50 each within the period to 30th September 1978, then Her Majesty's Government will make available:—

  1. (a) to the then holders of the 4 million shares in issue at 12th May 1975, 1,333,333 non-voting shares at a price of £1.00 each (plus half any excess of the marketing price over £2.00);
  2. (b) to the public, any other shares from those in issue at 12th May 1975 which have been acquired by Her Majesty's Government in the meantime, at the full marketing price.

11. If at the time of such a proposed marketing, the price at which this could be undertaken is, in the opinion of independent advisers, materially prejudiced by the performance of Transformer Division, then Her Majesty's Government will take appropriate steps in relation to any losses of that Division so as to enable a satisfactory marketing to take place at the price which would otherwise be achievable, and the Company will proceed with the marketing accordingly. In the event of this clause being invoked by the Company, then the offer of shares under Clause 10(a) would be at a price of £1.00 plus half the excess of the marketing price over £1.00.

12. The Board intends to recommend shareholders to support the agreement when submitted to an EGM and directors intend to use the votes of their shares and of those of which they are trustees accordingly.