Brick Production Under One Control

Sun (Auckland), Volume III, Issue 752, 27 August 1929, Page 7

Brick Production Under One Control

NORTH ISLAND MERGER JOINT FUNDS £572,000 With the amalgamations that have recently taken place in the brick and pipe-making industry at Wellington and Auckland, the control of all the substantial earthenware and brick works in the North Island and of two substantial concrete pipe companies is in the hands of the Auckland and Wellington companies. A further amalgamation is now proposed whereby the whole of the North Island trade may be placed under one unified control representing both companies. TX a circular issued by the Auckland company it is stated that the two boards have agreed provisionally upon a scheme which now requires confirmation oC not less than four-fifths of the shareholders in both companies. It is said that promises of support in each instance so far received make this result practically certain, though the directors hope to receive unanimous endorsement. BIG INTERESTS INVOLVED The proposal is to form a holding company to issue shares in exchange for tnoso of the two amalgamated companies. The issued capital of the latter totals £297,302, in £1 shares, in addition to whicli they have issued £275,000 in 7i per cent, debentures. Hence the projected merger involves interests exceeding £570.000. The organisations which it is proposed should join forces ,are the Amalgamated Brick and Pipe Company, Limited, of Auckland, and the Amalgamated Brick and Pipe Company (Wellington), Limited. Both have been operating for some months as the result of mergers of numerous individual concerns. The new company is to be called Consolidated Brick and Pipe Investments, Limited. The Amalgamated Brick and Pipe Company (Wellington), Limited, has been operating since June 1, and it was formed as the result of the merger of seven firms. Its authorised capital is £300,000, a total of 247,362 £1 shares being fully paid up. There is also an issue of £125,000 in per cent, first mortgage debentures. The Auckland company has been operating since March last, having an authorised capital of £350,000, in £1 shares, of which 307,689 shares have been issued. Four Auckland firms were incorporated in the new company. The company has an issue of £150,000» in 7* per cent, first mortgage debentures. AUCKLAND AND WELLINGTON CONTROL “The method proposed is by the formation of a holding company, which will acquire the shares in both companies from the existing shareholders, and allot them in exchange an equal number of shares in the holding company. The result will be that the assets and profits of the Auckland and Wellington companies will form a common fund and dividends will be determined by the net result of the two companies’ operations. A board of directors will be nominated, half by the Auckland company and half by tho Wellington company, and this board will have supreme control in all matters of general policy. Tho local companies will continue tlieir manufacturing and selling operations as at present, but will act in conformity with general lines of policy approved by the board of the holding company, and that board will draw from each company such profits as circumstances warrant, and the total of these profits will determine what dividends should be paid to all shareholders." In order to equalise returns for the current year it is proposed that the Auckland company should pay an interim dividend of 3 per cent, at September 30 next, and the Wellington company a dividend of IS per cent, at tho same date. When this is done the final dividend for the year and for all ; future years will be the same for all | shareholders of both companies who concur in the merger. NO COMPULSION The circular states that the boards of both companies and most of the large shareholders are strongly in favour of the scheme and have signed the provincial agreement. Xo one is compelled to transfer shares if unwilling to do so. A shareholder who does not transfer his shares will retain his present position and rights, says the circular, but the directors are of the opinion he would lose substantial advantages by his refusal. It is proposed to call the new company “Consolidated Brick and Pipe Investments, Limited."