WANGANUI WOOLLEN CO.

Sun (Auckland), Volume III, Issue 851, 20 December 1929, Page 10

WANGANUI WOOLLEN CO.

OPTION GIVEN ON WORKS MORE CAPITAL NEEDED From Our Own Correspondent WANGANUI. Thursday. An option, giving the holders the right to purchase the mills as a going concern on January 31 next for £55,000 has been signed by the directors of the Wanganui Woollen Mills, Limited. This information was given to a public meeting of businessmen and shareholders who met today. The identity of the option-holders was not disclosed. Mr. E. P. Sealey, manager of the Wanganui branch of the National Bank of New Zealand, detailed the action taken by the bank dictated by the general manager. After the appearance of the balance-sheet of the company, as at June 30. 1925, the bank was dissatisfied with the position. which showed accumulated losses totalling approximately £40,000. It was decided then to write off those losses and make allowances for machinery which had been purchased, and was unsuitable for 1 requirements, and to write the capital down by half. To keep its finger on the pulse of operations the bank asked for regular statements from the mills showing the position from month to month. PROPOSAL FOR PURCHASE After the-appearance of the balancesheet as at June 30, 1929, which revealed a working loss of £9,822, the bank notified the directors that they would have to submit fresh proposals for a further guarantee of fresh capital to cover the bank’s position. At that time Messrs. Macky, Logan and Caldwell, of Auckland, Iliad made some proposal about taking the mills over. The bank asked for a guarantee and was prepared to carry on until it knew what the next balance-sheet would show. Judging by the fortnightly statements which had been submitted since June 30 last, Mr. Sealey said he believed the mill was holding its own. The position had been further complicated, however, through one of the guarantors withdrawing his guarantee. The communication he had from his general manager was to the effect that the bank was prepared to free the mill building, plant and land from the debenture conditional on £25,000 being raised to reduce the Overdraft. To cover the balance of the overdraft it would require a joint and several to bo taken on the liquid assets, such as yarns and so forth, for £20,000. The margin of all assets over the bank overdraft amounted to £80,459.

Wanganui W r oollen Mills, Ltd., was formed after the war with an authorised capital of £200,000 in £1 shares. At June 30, 1928, £184,252 had been issued, paid up to £178,064. In September, 1928, a resolution was passed by the shareholders to reduce the authorised capital from £200,000 to £IOO,OOO by reducing the shares from £ 1 to 10s, and to write down the issued capital of £184,252 to £92,126. This made the paid-up capital £85,939, there'being £6,178 calls unpaid. This resolution was confirmed by. order of the Supreme Court in March last. The reduction of capital enabled the company to extinguish its establishment and preliminary expenses, £18,735, and the accumulated deficit of £39,171, leaving a balance of £34,219.