§ Dr. Stuttaford
asked the Secretary of State for Trade and Industry what are the terms on which he has agreed to support Norton Villiers Triumph Limited.
§ Mr. Chataway
Following negotiations between the companies concerned, offer documents were sent on behalf of Norton Villiers Triumph Limited (NVT) to the stockholders of the Birmingham Small Arms Company Limited (BSA) on 7th June. The offer is conditional on its acceptance in respect of not less than 90 per cent. of the stock of BSA or such lower percentage—in excess of 50 per cent.—as my right hon. Friend the Secretary of State and Norton Villiers Triumph Limited may determine. The Board of BSA recommends acceptance of the offer.230W
Norton Villiers Triumph Limited offers to acquire the whole of the issued share capital of BSA, and subject to the offer becoming unconditional Manganese Bronze Holdings Limited (MBH) will sell to NVT the whole share capital of its motor cycle subsidiary, Norton Villiers Limited. Most of the non-motor cycle interests of BSA will be sold by MBH and the proceeds will become available to NVT. As a result of these transactions, the motor cycle interests of the two largest manufacturers of motor cycles in this country will become united in NVT.
Subject to the offer becoming unconditional, my right hon. Friend has agreed to provide £4,872,000 to NVT in the form of a subscription at par for 3,500,000 £1 "A" redeemable preference shares and 1,372,000 £1 "B" convertible preference shares in the company. These shares will carry a right to a dividend of 5¼ per cent. net of tax—equivalent to 7½ per cent. gross from 1st May 1976.
Under this agreement my right hon. Friend will have the right to approve the appointment of the chairman and the chief executive of the company, and to request certain financial and other information relating to the company and its subsidiaries, and to appoint a director of NVT if this is at any time thought desirable.
NVT will have available bank facilities in excess of £13 million which have been arranged to support the first year's trading. The Export Credits Guarantee Department is continuing its support as in the past.
The company will not engage to a substantial extent in any other business than that which its original component parts carried on and there will be other restrictions on the company in relation to its borrowing and lending powers and the disposal of fixed assets. In addition, MBH undertakes not to reduce its interest in the equity share capital of NVT below 42 per cent., not to compete with NVT, and to provide information about its affairs in so far as they are connected with NVT and its subsidiaries.
If NVT is in breach of its obligations under the agreement my right hon. Friend can request the redemption of all or any of the "A" preference shares held 231W by DTI. If MBH fails to comply with its obligations my right hon. Friend can require it to purchase at par the DTI's holding of preference shares in NVT.