The Bank of New Zealand.
THE ESTATES COMPANY. The following appears m the commercial column of the "Melbourne Argus " of September 1:— " By the last mail we have received a copy of the prospectus of the Bank of New Zealand Estates Company, Limited, which has been formed to take over the globo assets of the Bank of New Zealand. The plan adopted is at once ingenious and simple, and practically amounts to giving a mortgage over the properties. The capital of the Company is fixed at £2,000,000 m 75,000 6 per cent cumulative preference shares of £10 each, and 125,000 ordinary shares of £10 each. With the exception of 15,000 preference shares (which are not to be issued at present) all the shares have been allotted as fully paid up, m part payment of the purchase money to the Bank of New Zealand upon the share capital of the Company. Power was taken to issue to the public £1,500,000 5k per cent debentures at £95, and the cash obtained from the sale of these debentures completes the purchase money payable to the Bank. The Bank of New Zealand therefore gets for its ghho assets :—• (1) 60,000 6 per cent preference shares at £10 each, £600,000.| (2) 125,000 ordinary shares at £10, £1,250,000. (3) Proceeds of £1,500,000 debentures at £95, £1,425,000. Total, £3,275,000. From this have to be deducted, first the formation expenses, and secondly a provision for redeeming the debentures at £103 m 1910, the total" difference m the price of issue and the redemption value being £120,000. As to the ghho assets themselves, they stood m the books of the Bank originally at £4,250,269, and they have been valued recently by Mr Hean at £3,107,993, so that on this showing there is an ascertained loss of £1,142,276. The revenue from these assets for the year ended 31st March last was £117,075 netfc, which is equivalent to about 2| per cent on the original value, and about 3f per cent on Mr Hean's valuation,. Supposing the debenture issue and the preference shares to be placed with the public the bank will have to pay m interest annually £118,500, so that the outlook is that for the present nothing will accrue to the bank itself from the qhbo assets, but the sale of the debentures and the preference shares will give it the command of something like two millions sterling, a provision which is considered ample for the paying of the British depositors if they should desire it, while leaving the Bank free to fully employ its other resources. That the Bank should have lost the large sum we have stated is a grave reflection upon its past management, but with the writing down of its capital and the rather unique scheme for obtaining funds which we have described it should now be quite safe. It is also entitled to look for an improvement m the value of a considerable portion of the globo assets as time goes on,
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The Bank of New Zealand., Ashburton Guardian, Volume VII, Issue 2513, 9 September 1890
The Bank of New Zealand. Ashburton Guardian, Volume VII, Issue 2513, 9 September 1890
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