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n Tobe
arldsh-AMC01CM Omo C4rnpany JHong Kong) Umik
"S A TVXW@ GVup
25 May 1990
Mr. John Selby
Finance Departm nt
Britlsh-Awrica: Tobacco Co Ltd
7 Millbank
London SWIP 3JE
England
Dear John,
ECGD FINANCING FOR CHINA DIET PLANTS 4A
We have now accepted the facility offer from the Mong_4pKB&nk for a 5
year ECG0 Sterling loan of E9.5 mn for.our DIET plant project In China.
The repayment will start from June 1993 and mature in December 1997.
Interest is charged at 0.3% p.a. on a reducing balance basis. We will
convert the Sterling repayments Into U.S. dollars through a series of
long-dated forward contracts at a later date. I enclose a copy of the
loan facility letter for your r*cords.
Pleas# note the invoicing arrangement is that Distillers (the
manufacturer) will Invoice BATCO (the supplier) who will then
re-invoict BANK (the borrower). 8ATC0 will present its Invoice and
documents to Midland Export Finance Ltd (MEFL) in London (the export
credit providier) for payloant. HER will in due course issue a payment
undertaking in favour of BATCO Incorporating the torms and conditions
on which payment will be made to BATCD. I enclose a draft of the
payment undertaking for your review and agreement. With regard to the
muirod docoments, 14EFL have accepted that Distillers will be shown as
the shipper In the Bills of Lading and the packing list will be issued
by Distillers.
Pleas* also note that under the ECDG financing, our I"n amount is
j equal to 85% of the full contract value i.e. 85% of L11,22S,370 a
C9,541.565 whereas the amount payabl* to Distillers is L9,10,130 i.e.
a surplus of 0811,435.00.
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B.A.T INDUSTRIES P.L.C. - MINNESOTA DEPOSrTORY COPY - PRODUCED PURSUANT To VILD. OF
CONSENT JuoGmENT DATED 5/6198 IN STATE OF MINNESOTA, ET AL. V. pfflLjp AjoRgs, ET AL., CASE No. Cl-94-8565
1,@A T-
I enclose a proposed invoicing procedure for BATCO. Essentially, for
item where a deposit payment of 25% has already been made to
Distillers, BATCO will gross up the value to 100% in Its invoice to
BATHK and issue a separate credit note to BATHK for the 25%
overcharged. Only the invoice will be presented to the bank. Upon
receipt of the loan proceeds, BATCO will pay 75% of the value to
Distillers leaving the 10% surplus to the credit of our current account
with F(Illbank. The accumulated surplus will be remitted to our account
with BATUKE, Waking upon our instructions from time to time. For items
where no deposit has been 'paid to Distillers, 14EFL will similarly pay
85% of the full value. BANK will raft the shortfall of 15% direct to
Millbank. The BATOD accounting entries are illustrated an the attached
proceduie note.
Please confirm whether the proposed Invoicing procedure is agreeable to
you.
Yours sincerely.
Andrew Ch*umg
AC/bs
Encls.
C:@
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B.A.T INDUSTRIES P.L.C. - MINNESOTA DEPosrroRy COPY PRODUCED PURSUANT To VILD. OF
CONSENT JUDGMENT DATED 618198 IN STATE OFUNNESOTA. ET AL. V. PH&ip MORRIS, ETA CAsENo.Cl-94-8565