FLOATED.

Taranaki Daily News, 12 July 1921, Page 4

FLOATED.

HYDRO-ELECTRIC LOAN. '£60,000 AT SEVEN PER CENT. MONEY RAISED IN SYDNEY. NO STOPPAGE OF WORK. The successful flotation of the New Plymouth Borough Council’s hydro-elec-tric loan of £60,000 at 7 per cent, on the Sydney market was anounced by the Mayor (Mr. F. E. Wilson), at last night’s meeting of the Borough Council. The money is to be obtained from the A.M.P. Society. The Mayor said it was a matter for congratulation to all concerned. Not only did it mean keeping the employees at work, but also this turn of events would enable the council to keep faith in their various contracts, especially in the case of the agreement to supply power and lighting to Inglewood Borough Council. Further, the fact of the work being continued without interruption meant that the money already spent would come into fruition sooner. A letter was received from the A.M.P. Society confirming the fact that the loan had been granted, and stating that advice was being awaited as to the council having obtained formal sanction to pay 7 per cent, interest for the loan. A detailed account of the efforts made by the deputation to Wellington last month, and t'he subsequent negotiations in regard to the loan, was given ’in a report made by the general manager (Mr. F. T. Bellringer). The other members of the deputation were Mr. S. G. Smith, M.P., and the Mayor. SAVING TO COUNCIL. The report stated: “Mr. Smith and I arrived in Wellington on the evening of Saturday, the 25th ultimo. On the 26th we were fortunate enough to meet Mr. Buckleton, the general manager of the Bank of New Zealand, and to have an interview with him of nearly two hours’ duration. The information we received from him was valuable aud was of great assistance to us. At first he was not hopeful of our obtaining any money from the A.M.P. Society, but after placing before him the position from the point of view of the policy-holder (already verbally explained to the council) he thought the line of action suggested was well worthy of a trial, and advised us to go ahead, and he would assist by every means in his power.” The report then went into details of other financial arrangements with the bank, which were successfully dealt with at the interview in question. “These details (the report stated) are confidential for the time being, but the result attained represents a saving to the council of approximately £lOOO for the first year, gradually reducing to a permanent saving which can safely tye estimated at £6OO per annum. On Monday, the 27th ult. after a further conference with Mr. Bucklcton, we met the general manager for New Zealand of the Australian Mutual Provident Society. After a long discussion he agreed, subject to a formal application in writing being made, to recommend the £60,000 hydro-electric loan to his New Zealand board. The terms were to be interest at 7 per cent, per annum, payable free of exchange in Sydney; sinking fund iy 2 per cent., to be invested in re-purchase of debentures of the loan. Debentures were to be of £lOOO each, except that twelve should be of £9OO each in order to enable one to be re-purchased by the sinking fund commissioners each year. PERIOD OF THE LOAN. “The loan was to be for a period of i approximately twelve years, expiring on April 1, 1933, principal payable free of exchange in Sydney; the money to be payable to the council in instalments of £5OOO per month with the right to the council to increase not more than three of the instalments to £lO,OOO upon giving reasonable notice to the society. Before submitting these terms we discussed the matter with Mr. Buckleton, jand he agreed that they were as favorable as could possibly be expected, and, /indeed, under present circumstances were very satisfactory. Compared with the 33 years period required by the Government for the State guarantee, the A.M.P. conditions represented to the council a saving of approximately £13,950, in addition -to which the council save from £6OO to £9OO brokerage, and a very large sum in advertising and other expenses. After arranging the terms with the A.M.P. we interviewed the Secretary of the Treasury, Colonel Campbell, explained the whole position to him, and obtained his consent to pay the 7 per cent, interest.” The deputation was joined by the Mayor on the following day, and the report, continuing, stated: “Later we waited upon the manager of the A.M.P. Society, and were informed that the New Zealand Board had strongly recommended head office in Sydney to grant the loan, and that the decision would be communicated to the council by telegraph on Thursday next. This informatio» we conveyed to Mr. Buckleton, and received his congratulations upon a succeetful mission. He also confirmed the other financial arrangements previously reported. In the afternoon we made a further endeavor to see Colonel Campbell, but he was at a meeting and could not be seen. He was, however, communicated with by telephone, and advised us to see the assistant secretary (Mr. Waddell), with whom he had discussed our business. This we did, and Mr. Waddell confirmed the promises which Colonel Campbell had made to me.

“Tn concluding this report I would recommend the council to pass a vote of thanks to Mr. Buckleton for the invaluable assistance which lie rendered to the deputation. He went to the greatest trouble in the matter, and could not possibly have done any more than he did. In addition he was courtesy itself. Mr. Smith, M.P., is also deserving of our best thanks. He was a very live member of the deputation, and is entitled to as much credit as anyone for the success which attended the deputation’s mission.” RAISED AT PAR. The Mayor said it was a matter for congratulation that the suggestion made by Mr. Bellringer to approach the Australian company had been given effect to, and that the loan of £60.000 had been floated at 7 per cent., without any deductions whatsoever. They had yet to secure consent through Order-in» Council, but no difficulty was anticipated

in this direction. He pointed out that the loan had been raised, at par, without any deductions for commission, and in that respect compared very favorably with the Government Joan just negotiated. When the deputation wan in Wellington they saw the securities quoted on the Sydney market, and only in two cases was the rate below that at which the council’s loan had been secured; in these instances also the dif-< ference was very email. Continuing, the Mayor said the money was to be advanced as the work proceeded by monthly instalments, with the option to ask for a double instalment at any time, and this would seex them through for twelve months. To-

gether with the arrangements made through the bank in respect to the* £72,000 loan, this should see the com-a pletion of the modified scheme—namelyJ for the development of 3000 horsed power. The society had also agreed tai accept the sinking fund yearly, whiclr would mean that the loan would be reduced yearly, or,* to put it in other,• words, the council’s sinking fund would) be permanently invested at 7 per cent. The term of the loan was twelve years, and by that time he confidently expected that the money market would have eased considerably. In accepting) the loan for twelve years the coumcil had avoided the difficulty which thejft had experienced formerly in regard tdf the Government guarantee. THE LARGER SCHEME. Mr. Wilson acknowledged the greag indebtedness of the deputation to Mq H. Buckleton (general manager of the) Bank of New Zealand), and Mr. 8. G 4 Smith, M.P., for assistance renderedj Valuable help had been given by Mn Buckleton, who devoted some timo tq smoothing the way for the negotiations* On the motion of the Mayor a heartw vote of thanks was accorded Messrs’ Smith and Buckleton, and on the re* solution of Cr. Kibby, seconded by Blackhall, the deputation, were alee] thanked for their work. A cable was also read from Mr. J, Leggatt, London, in connection with. negotiations for raising loan moneys, and the council decided to reply stating that the finance of the partial scheme has been assured, and the question of providing for the larger scheme would depend on whether satisfactory ar-» nangements could be made with Mr. Loggatt’s principals for the sale to them of a large portion of the output, la previous negotiations soma time ago Mr. Leggatt had put a proposal before the council for purchasing a cartftiii, quantity of power in connection with. irotisand development.