c . c .G. M. Duthie , Ego with origi no I incoming I atter N.-@
BAT INDUSTPIES
Windsor House 50 VCJ or, a Sireel London SVVIH ONL Telephone 01-222 7979
EJ Sth January 1983
N.W. Goddard. Esq.,
8, it Tobacco Co. Ltd.,
Westminster House,
7 Millbonk,
LONDON, SWI.
Door Noel.
B.A.T Industri*s Policy and Information an
Borrowings by Subsidiaries and Asxociatod Companies
I refer to your letter of 29th November in regard to the
:uerjes you raise.
. Now Borrowings
a) Your definitions *f 'core' borrowings and materiality ore,
quite satisfactory.
c) Attached is a list of lenders with significant contacts elsewhere
in the Group.
It I. Intended that consultation about now borrowings should e.
to local currency borrowings. Total Group debt in all currencies has
now grown to a very large figure - in excess of the equivalent of
C1.3 billions. Much of this Is In external currencies or domestic
LIS dollars and hitherto these have been our chief concern. Nowe,ver,
the local currency figures are now reaching quite, high figures -
the BATC. Group accounts for more than CIDD million - and the central
treasury function should be in a position to assist in ensuring that
the most appropriate terms ore obtained.
In practice this involvement should not be onerous. Th* frequency
of fresh borrowings within the actoriality definition will be relatively
few. The local management ought to be wall placed to identify and
negotiate best available local terms but a reference to Georg* Duthie's
deportment, particularly if fixed interest rate. longer term debt
is contemplated. cowIcl be helpful.
Associated Companies
These poso a problem and there is no easy aninmr. I ogres that we
do not want our involvement to suggest any commitment on our port, moral
or otherwise, to the associated companies creditors. On the other hand. M)
there are Instances, e.g. Mexico, where post subsidiary company C:0
relationships and our continwing significant shareholdings ore sueh that
our reputation is already at stoke.
LA
CD
*an To 0%
Copy PRODUCED PURSUANT TO VILD. OF
B.A.T IMMMFS p.L.C. - MMESOTA DW@ v2mv All- CASE No. C14M-W5
CONSENT juOsLaw DATED swn im STATE OF A&AMSOTA, ET AL v- ME

N.W. Goddard, Esq. - 2 Sth January 1983
Your practice of ..4- considerable caution In these matters
Is the correct on*. Cos@ by case treatment is called for. Wh*re we
have a director on the board he can be asked to be kept informed and pass
the Information on to you or your finance department and then on
to Duthie.
Whe r* there is no director and you be lie,* the associate's
actions could Impinge on the Group. then there may be no alternative
to asking to be kept informed. It is for you to judge how best an
associate should be opprooched.
Incidentally. the phraseology of the final paragraphs of your
letter suggests that you would be writing to associates on behalf
of B.A.T Industries and that associates should seek odv from
B.A.T Industri*s on no- borro.ings. This is not the intention.
Communications would be through BATCo. which how a direct responsibility
for ensuring that subsidiaries and associates are soundly financed.
Yours sincerely.
E.J. Symons
Enc.
C:)
B.A.T INDUSTRIES P.LC. MINNESOTA DEIVINTORY COPY - PRODUCED PURSUANT To VILD. OF
CONSENT JUDGMENT DATED SON IN STA TE OF UNNESOM Er AL V. PMLP AIORRAL Er AL- CASE No. C1 9 i 81925