WAIKATO FINANCE LTD.
NZ Truth , Issue 1250, 14 November 1929, Page 10
WAIKATO FINANCE LTD.
New Venture To Assist Farmers And Town Businesses
(By "Fiat Lux")
The public is being asked to subscribe shares m this new concern, either m the form of 7 per cent, cumulative preference shares or ordinary shares. . . The authorised capital is £250,000 and 100,000 preference shares - and 150,000 ordinary shares are now offered for public subscription.
THE 'minimum subscription is fixed at 10,000 shares and it is stated m the prospectus that SO,OOO ordinary shares have been underwritten, which guarantees the establishment of the company. »The directors are: — Frank Vickery, Hamilton, motor importer; David Andrews, Hamilton, builder; Walter Cooper-Smith, Tuhikaramea,' farmer; Norman James Holden, Hamilton, agent; James Edwin Tidd, " Hamilton., merchant, who are described as "all well-known and capable men, representative of different business knd producing interests, who have made ah unqualified success of their own business affairs." The proposed operations of the company run along the usual lines of such companies and are summarised as follows — (1) The provision of finances to develop existing: businesses of a sound nature, both m town and- country. ..i (2) Assistance to farmers, .dairymen, and primary producers general ly, for such purposes as paying off existing mortgages, raising loans, placing increased areas uHfder cultivation, purchasing additional stock, plant andnjachinpry, also by making advances against crops and chattels, -etc. (3) Financing of sub-divisional propositions,' erection of new buildings and shops, and improvements to existing establishments. > " : . ,(4)V;r Assistance; to new:.- companies where -proof' is given that tlie .undertaking i'vinherCntly sound arid; shows every promise of . success. 7 7 7(5) Assistance to private individuals arid traders m such matters as the purchasing of machinery, implements, motor-trucks, arid stock. The prospectus states tha.t it is confidently anticipated that the return to the ordinary shareholders, as a conservative estimate, will toe at least 8 pet* cent, per annum, and that the Corporation' will m addition be able to build up substantial reserves. The success or otherwise of the company depends upon its management. Tt must be remembered that the demands of borrowers are at present catered for pretty freely by the Government institutions (such as the State • Advances Department, Public Trust Office, Government "Life Insurance
Department), life insurance companies, banks, stock and station companies, dairy factories, and a number of finance companies, m addition to private lenders. In' order to avoid losses, therefore, it is necessary for every care to be taken with advances and the risks should be well spread. There should, however, be scope for a well-managed company In a thriving and rapidly-developing territory such as the Waikato.. The support of the company will doubtless come from local investors to whom the directors are known. The question of overhead is very important m a company such as the one under review. The prospectus states that 'the head office will be m Hamilton and there will, if necessary, be branch offices m other centres. It is to be hoped that the question of branch offices will be left over until the head office has proved inadequate for 'the business offering. Iri many businesses the opening of branches m every small township has proved a serious drain upon the resources of the concern and unprofitable branches have whittled down the profits made m other directions. With the modern posting and travelling facilities, centralised control and working are much more feasible than' was the case a few years ago. The .minimum subscription is 10,000 shares, ; which' 7is small enough for a companywith an authorised capital of £250,000,* but 30,000 ordinary shares have been underwritten and if 10/- per share is called -up, the company will commence with a capital of £15,000. It is satisfactory to note that no promoters' shares are being issued and no consideration of any kind has been given or promised to any person to induce him to become a shareholder. The underwriters are entitled to receive^ a brokerage commission of • 5 per cent, and an underwriting fee of 2% per cent, and there is provision, m addition, for payment of disbursements and out-of-pocket expenses — an expenditure somewhat difficult to define. With careful management there is no reason why the shares should not prove a satisfactory investment.