FINANCE.

Manawatu Standard, Volume LVII, Issue 212, 7 August 1937, Page 4

FINANCE.

CAPITAB REORGANISATION. N.Z. LOAN AND MERCANTILE AGENCY CO„ LTD. WELLINGTON, Aug. 7. Mr F. R. Bushel), superintendent for Now Zealand of the New Zealand Loan and Mercantile Agency Co., Ltd., has received the following information regarding the capital reorganisation proposals from the London office of the company : Copies of the scheme, together with an explanatory circular, are being dispatched from London by air mad, so that full details will be. in the bands of New Zealand stockholders, and ample time after receipt will be given stockholders to enable them to consider the scheme and determine how to vote. Separate meetings of 6J per cent, cumulative second preference stockholders and ordinary stockholders will be held in Tendon on October 5 to approve the scheme. Special arrangements have been made to enable New Zealand stockholders to deposit their proxies for or against the scheme at the company’s head office for New Zealand in Wellington, and such proxies will he cabled to the secretary of tho company in London ptior to the abovementioned meetings. DRASTIC PROPOSALS. Tho scheme becomes operative only after tho approval of each meeting by a threefourths majority, and after confirmation by the Court in London. The scheme provides : (1) Payment in full of all arrears of dividends on 5 per cent, cumulative preference stock in cash, together with dividend for the-year ended Juno 30 last. (2 1 In consideration of the 64 per cent, cumulative second preference stock being converted into £500,000 ordinary stock and all arrears of dividends being cancelled, the 64 per cent, cumulative second preference stockholders would receive £7(1000 cash and £250.000 ordinary stock. (3) Ordinary stockholders to surrender one-fourth of their existing holdings to provide ordinary stock for 65 per rent, cumulative second preference stockholders, and a further one-fourlh of their holdings arc to he cancelled end so reduce share capital. If the scheme is carried out the sharecapital will consist, of £1.000,000 5 per cent, cumulative preference stock and £1,250.000 ordinary stock. The latter will bn held £750.000 by present 64 per cent, second cumulative preference stockholders, £500,000 by present ordinary stockholders. Arrears of dividend will have thereby been settled or cancelled. From the point of view of the ordinary stockholders the scheme has the advantage that, in addition to clearing oft all arrears of dividend on the 5 per cent, preference stock, it will remove £500,000 64 per cent, preference stock, with arrears of dividend, all of which at present rank in priority to the ordinary slock, thereby rendering the payment of dividends on the ordinary stock again possible as soon as profits arc available for dividend, whereas apart from some such scheme it is obvious that no dividends could be paid on the ordinary stock for many years. The directors feel that the scheme is SO equitable to both classes of stockholders that it will meet with the general approval of all stockholders, and will probably' be passed by the necessary majorities. DIVIDENDS IN ARREARS. At present the New Zealand Loan and Mercantile Agenc.v Company, Lid., has a canital of £2,500,000, made up of £1,000,000 in 5 per cent, cumulative preference stock. £500,003 in 64 per cent, cumulative second preference stock, and £1,00,000 in ordinary stock. In addition the last balance-sheet showed £1.000,000 in 4 per cent, first mortgage debenture stock and £1.000,000 in 4 per cent, second mortgage debenture stock (inclusive of £300,000 held by the company per eonti-A). For the year ended June 30, 1936, the profit and loss account showod a balance of £156,252, which with £55,709 brought forward, made a total o-f £211,971 available. From this was cleducted £68,000 interest on debenture stocks, leaving a sum of £143,971. Out of this was paid one and a half year's dividend on the 5 per cent, cumulative preference stock, i.e., for the year to Juno 30. 1933, and for tho half-year to December 31, 1933, taking £75.000 gross and leaving £68.971 to be carried forward. Thus, dividends for 34 years on the 5 per cent, cumulative prcferenco Stock were duo at June 30. 1937, a total of £175,000 which will be paid if the directors’ present proposals are adopted. The 61 years’ dividends on the 6 per cent, cumulative Second preference stock -—front January 1. 1931, to Juno 30, 1937 — amount to £211,250. The ordinary stockholders have received no dividend since 1930. when 4 per cent was paid, compared with 8 per cent,, for 1929 and 1928.