Page 10 Advertisements Column 3

Press, Volume LXI, Issue 18414, 22 June 1925, Page 10

N.Z. FARMERS' CO-OPERATIVE ASSOCIATION OF CANTERBURY, LIMITED. PROPOSED. REDUCTION OF CAPITAL. During the past few years many trading companies, like the Government itself, nave, had to lac© a difficult task in overcoming the conditions created by the slump period. In l some cases, especially with companies largely depending on the farmer for their prosperity, the difficulties have been specially severe and have called for a thorough financial re-or-ganisation. THE PRESENT POSITIONThe present condition of tne pioneer farmers' co-operative concern —the N. Z. Farmers' Co-operative Association of Canterbury, Ltd.—is receiving special attention just now from the shareholders, by reason of tho directors' proposal to reduce ordinary share capital and eliminate accumulated loss. A letter to shareholders, issued by tne directors, states that at the present time the accumulated" liability of tho Association is £102,824 lite SJa, To liquidate this sum over a period of five years would mean the payment of' such large annual sums out of profits that tho burden would be unduly heavy. . The directors have faced the position boldly, and propose that the existing liability be wiped out by combined action of all shareholders. It is suggested that ordinary, shareholders write the sum of 15s per share off share capital, and that all preference t>har& holders relinquish and extinguish their cumulative rights attaching to such shares as from 31st July, 1922. "BACK TO PROSPERITY.'' As the circular states,, the aim of the directors "is to get the Association back to such a. profit-earning basis as will enable it to pay a dividend to all classes of shareholders," and it is believed that if tlio suggestions arc adopted, the present year's operations will be sufficiently satisfactory to wur.rant the payment of a half-year's dividend on preference capital when the next balance-sheet comes down. From a persual.of the report, it is obvious that the directors' proposal is one that should meet with general approval. The accumulated liabilities are not merely a burden, but a deadweight drag on the steady recovery of the Association's financial condition. It is agreed by business experts that no good purpose can be served by carrying on with such a load, and shareholders should jyefer that lost capital be written off so that dividends can be paid as speedily as possible. Of course, the proposed writing-oif makes no essential difference to the actual value of the shares; it simply means that the existing loss is got rid of once and for all, instead of being kept on the books as a hurdle for future years. Dividends cannot be paid until the debt is disposed of; the directors suggest that it be wiped out at one swoop, so that confidence in the Association may bo restored immediately, and dividends paid to all classes of shareholders at the earliest possible date. POSITION IMPROVING. The improved position of the N.Z. Farmers.' 00-op., as compared with twelve months ago, is shown by the current Stock Exchange rates, 6£ per cent. Inscribed Stock (1930) stands at £9O, as compared with £BO a year ago; the 1935 Debentures are at £B3, as compared with £75 a year ago. The growing prosperity of the Association should encourage shareholders to fall in with the directors' suggestions for re-organisation and stabilisation, and thus help the Association to enjoy its oldtiake stability and success, 1