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LOAN FOR ELECTRICAL EXTENSIONS.

£IO,OOO TO BE RAISED BY DEBENTURES. WORK IN SIGHT WILL ABSORB IT; The raising of £IO,OOO by means of debentures was decided on at the meeting of the Ilorowhenua Power Board on Tuesday. The Finance Committee reported that they had gone into the matter of raising further loan moneys and found that there were demands for extensions which would probably keep the construction gang employed for some time to come. The Makerua-Itangitane lines, proposed extensions at Tokomaru, Manakau, Raumati Beach and Paekakariki would, before completion, entail a considerable outlay. At the present stage it was very difficult to say what amount would be required to complete the reticulation of the Board’s district. It was quite safe to say, however, that a further loan of £IO,OOO would be absorbed by the work in sight. Loan moneys previously raised had already been used, and in- tho meantime advances were being made from the Eeto keep the work progressing. These advances would be refunded when further loan moneys were available’. After consideration the Committee had resolved to recommend that the Board place on the local market Debentures to the value of £IO,OOO, bearing interest at 5| per cent, for a term of 20 years, and with a sinking fund of 2 per cent. The Chairman (Mr Monk) wiio moved the adoption of the recommendation, said there was some doubt as to whether the 2 per cent sinking fund would quite wipe the loan out, but they had found that a 2 per cent sinking fund was a fairly good one. Some small amount might have to be raised later for replacement. He did not know the state of the local marker, but apparently there was plenty of money in the country and. the Board s debentures should be readily saleable. The Committee had discussed whether they should make the amount of the loan £IO,OOO or £15,000, but apparently there were no difficulties in the way if they wanted more money later. In reply to a question by, Mr Hyde as to the relative cost of the proposed method of raising the loan, the Chairman stated that the expenses were confined, to a little advertising and the printing of the debentures. It would cost the Beard a little more if they had to raise the loan from one of the Departments.’ The Secretary- (Mr Goldsmith) stated that the method proposed was the cheapest Avay to raise the loan. Mr Vincent said that, as lie had mentioned at the committee meeting, while a sinking fund of 2 per cent was not a great deal on £IO,OOO, they were building up a nice business for posterity. He asked the Chairman if he did not think that they were burdening the loan too much at the present stage. The Chairmap: No; our present loans are pretty long ones. Mr Seifert: This sinking fund is an offset. The depreciation is more than two per cent. In effect it makes no difference in making up our balancesheet. If there is £2OO sinking fund on this, it is allowed off our depreciation account.

The Secretary stated that the sinking fund stipulated by the Loans Board for a loan of 20 years at' 5 per cent interest was £3 0s fid per cent. Mr Hyde: The average sinking fund would not be more than about one and a-half per cent, on all our loans? The Chairman: It is probably one and an-eighth over the whole. The Secretary stated that a good sinking fund should make the debentures attractive to investors. The Chairman: As far as the cost of tho “juice” to the people is concerned, the two >pcr .cent, will not make any difference.

The motion was seconded by Mr Hyde, and carried.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/SNEWS19291122.2.23

Bibliographic details
Ngā taipitopito pukapuka

Shannon News, 22 November 1929, Page 4

Word count
Tapeke kupu
626

LOAN FOR ELECTRICAL EXTENSIONS. Shannon News, 22 November 1929, Page 4

LOAN FOR ELECTRICAL EXTENSIONS. Shannon News, 22 November 1929, Page 4

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