FARMERS’ TRADING CO.

Hauraki Plains Gazette, Volume XXXIV, Issue 4643, 28 December 1923, Page 2

FARMERS’ TRADING CO.

BONDS AND FIXED DEPOSITS. REARRANGEMENT OF FUNDS. A meeting of the bondholders an 1 depositors of the Farmers’* Union Trading Company, Limited, Auckland, will be held in January for the purpose of considering an arrangement affecting fixed and matured deposits and b.onds. A circular issued by the executive officers and directors states that it is proposed to transfer the prospective holdings of depositors and bondholders into “secured debenture stock,” secured by a floating charge over certain of the assets, of the company. ; The. deposits and bonds involved amount tp £387,240, and the assets available for security total £740,000. To meet the abnormal conditions of three years ago the company raise-l £248,475 by means of a bond issue at the higii rate of interest of 7% per cent., free of income tax, which cost the company another 3s in the £, thus ' bi ingiiig the total up to £8 12s 6d, or over 8% per cent., which it will be readily admitted is prohibitive under, present trading conditions. It is proposed to ask bondholders ro grant an extension of time and a reduction of 1 per cent, in the rate of interest. As these bonds have no specific security over the assets of the company it is believed that the security now offered will appeal to most bondholders as ample compensation for the reduction of 1 per cent, interest, and as the interest rate in general is falling, the 6% per cent, now offered on a secured investment over an extended period will probably in a short time be yielding a higher rate of interest than is generally ruling. The company also proposes that it be released the obligation to pay the bond tax of 3s in the £, but will undertake to reimburse any holder the amount of tax he will be required to pay upon income derived from his converted investment. The proposals are on similar lines ro these recently adopted by . the New Zealand Farmers’ Co-operative vf Canterbury.