Frank butted in, “I have heard rumours of this in the city as well, and in fact more than that, I have had an informal approach. The story is that they have a number of very large partially completed contracts that have technical problems.”
“What technical problems?”
“It appears that they have oversold their current control package and it is not performing to spec. The end result is that they are not getting paid; this has been going on for some time and is beginning to cause them serious cash flow problems. They have been unable to convince their banks that they can fix the problem so their banks are hesitating to support them.”
“The rumour is that they might seek chapter 11, in the next week or so.”
“Chapter 11? What on earth is that?”
'It’s a form of protected administration, quite common in the US.” responded Alec.
“Wow! So much for them buying us out.”
“Yes,” said Alec, “it is a bit of a turn around. The question is, is this the end of our interest in them or is it an opportunity for us?”
“You mean buy them out of administration?”
“Possibly,” said Frank, “but administration is never good for the reputation and it might not go well so their banks could face losing quite a bit of money. Ron believes that gives us leverage. This company probably has the technology to fix their technical issues and if we were interested their banks might look more favourably on supporting them.”
“In which case we have to do Due Diligence on those contracts,” I said, “we don’t want to take over a never ending contractual wrangle on specs.”
“I agree,’ Alec said.
“If the banks face the possibility of a haircut then presumably the shareholders are dead in the water,” added Frank.
“Yes probably, but I think this may answer any queries we had about Mendip Finance's aggressive interest in us. The shareholders were desperate to retain some value to their investment in the business and thought they could conceal their cash flow issues by raising funds to acquire us and at the same time have a technical solution to their contractual completion problems. I think they identified us as the only solution for them and they were therefore desperate to buy us.”
“Neat,” I said, “Is this why I got beaten up and both Alec and I got threatened?”
Alec nodded, “It seems it could be.”
“Who are the shareholders? The ownership structure disappears in to the murky depths of the Cayman Islands, probably impossible to deal with.”
“That would probably not be necessary,” mused Bill Williams. “If their bank was taking control then they would be able to sell the business, not the company, to us although there would inevitably be lots of issues to c onsider including tax.”
“I don't think we want to get bogged down in the mechanics at the moment,” said Frank. “A s company chairman I think this opportunity has significant potential and should probably be explored, however I am conscious that it can only be done if you think the team can cope with it Alec.”
“With my marketing hat on I think it seems too good an opportunity to miss. I would need time and more information to assess whether we could handle it operationally.”
“Sounds like we all agree that we should take this further,” said Ron. “I think we could be glad that we held on to 3 % and if you need a bit more cash to consummate a deal we could help. At a price of course!” We all laughed.
“Well, if you agree Alec, I will informally brief each member of the board. If decisions have to be taken quickly we need to get them on board as soon as possible. If possible I will set up a date for a board meeting in the next couple of days. Alec, I think you need to set up a meeting with the Dalrymple CEO, Mark Winter. After that I will try and set up a meeting with the Dalrymple bankers. I think you could help me with that presumably through your 'informal approach'.
“Yes, who was the 'informal approach'?”
“I would rather not say at the moment, but they can help us set up a meeting with the bank.”
“Well it seems that the only one who has nothing to do out of this is me, that's a nice change!”
“Don't gloat yet Martin, if this does go ahead, solving the technology problems on their contracts will become your headache!”
I returned to my office to find that the draft agreement had come through from Dave Withers. I called him.
“Dave, I have read the agreement and there is nothing in there that I can't accept. I expected a much bigger document.”
“Its written under US law, and typically their contracts are much shorter than ours. As an English lawyer some of the shortcuts in terminology grate but in reality they do te nd to get rid of the verbiage of some of our contractual law.”
He continued, “I will tell them to go ahead, can you print off two copies, and sign them, and get them witnessed and courier ed back to me this afternoon? I will then get a copy off to them before the end of the day.”
CHAPTER 36
The following afternoon that familiar voice with the American accent called again. “Be at this address in an hours time and you will meet someone you know,” he said and proceeded to qu ote a six figure postal code. “M ake sure you come alone.”
I put the postal code in to Google Map on the computer and came up with a location out in the sticks just north of Tetbury in Gloucestershire. Immediately I was out to the car and with the postal code set up in the Sat Nav set out on the road to Tetbury which is approx. 25 miles from the office, to find what I assumed would be Adrian’s location.
North of Tetbury the Sat Nav took me down a narrow country lane and eventually told me I was there when I stopped outside a small cottage at the side of the road. It was quiet, nobody around. I got out of the car and shouted, “Adrian! Adrian, can you hear me?” Nothing moved except for the rustle of the breeze through the trees. Total silence. Then suddenly from around a corner 50 yards further down the lane appeared a figure, “Adrian, is that you? Are you OK?” I shouted and ran towards him.
We embraced, “never have I been so glad to see my little brother,” I gushed.
“After all of this you won’t want to see me again soon I expect.” he grinned. He looked tired, dirty, and dishevelled, but otherwise well.
“Come on let’s get you home for a shower,” so we piled in to the car and headed for home about 15 miles down the road.
“You have heard the rumours going round that it was suicide have you?”
“Y es they tol d me.”
“I think that means we can forget the need to publicise that material in the public interest. The person concerned has paid the ultimate price for his actions.”
“I suppose that is true.”
“Can I use your ‘‘‘phone,” he asked. “ I need to call Rowana. ”
“Oh. So that's her name is it? I couldn't even tell the police her name and address when we were looking for you.”
At home while Adrian was showering I called Lloyd to tell him the news. He said he would like to come out and see Adrian immediately.
I then rang Alec to tell him the good news and said I would not be in for the rest of the day.
