First Among Equals

“What would happen if we put our seven and a half percent up for sale and did not renew the overdraft facility at the end of the quarter, but called it in instead?”

“They would have to seek finance elsewhere.”

“And if they couldn’t?”

“They would have to start selling their assets, which under that sort of forced-sale position would be very damaging for any company, if not impossible, in the present climate.”

“And then?”

“I would have to check my file and …”

Charles passed over the file and Reynolds studied it carefully, frowning. “They already have a cash-flow problem because of bad debts. With a sudden increased demand they might go under. I would strongly advise against such a move, Chairman. Nethercote have proved a reliable risk over the years, and I think we stand to make a handsome profit when they are quoted on the Stock Exchange.”

“For reasons I cannot disclose to you,” said Charles, looking up from his chair, “I fear that remaining involved with this company may turn out to be a financial embarrassment for Seymour’s.” Reynolds looked at him, puzzled. “You will inform the Midland Bank that we will not be renewing this loan at the next quarter.”

“Then they would have to look for support from another bank. The Midland would never agree to shoulder the entire amount on their own.”

“And try to dispose of our seven and a half percent immediately.”

“But that could lead to a crisis of confidence in the company.”

“So be it,” said Charles, as he closed the file.

“But I do feel—”

“That will be all, Mr. Reynolds.”

“Yes, Chairman,” said the mystified chief executive, who had never thought of his boss as an irrational man. He turned to leave. Had he looked back he would have been even more mystified by the smile that was spread across Charles Seymour’s face.

“They’ve pulled the rug out from under our feet,” said Ronnie Nethercote angrily.

“Who?” said Simon, who had just come into the room.

“The Midland Bank.”

“Why would they do that?”

“An outside shareholder put all his stock on the market without warning, and the Midland got worried about their position. They wouldn’t be prepared to continue such a large overdraft position on their own.”

“Have you been to see the manager?” asked Simon, unable to disguise his anxiety.

“Yes, but he can’t do anything. His hands are tied by a main board directive,” said

Ronnie, slumping deeper into his seat.

“How bad is it?”

“They’ve given me a month to find another bank. Otherwise I’ll have to start selling some of our assets.”

“What will happen if we don’t manage to come up with another bank?” asked Simon desperately.

“The company could be bankrupt within weeks. Do you know any bankers who are looking for a good investment?”

“Only one, and I can assure you he wouldn’t help.”

Charles put the phone down satisfied. He wondered if there was anything that could still be regarded as secret. It had taken him less than an hour to find out the size of Kerslake’s overdraft. “Banker to banker confidentiality,” he had assured them. He was still smiling when Reynolds knocked on the door.

“The Midland weren’t pleased,” he immediately briefed Charles.