AUCKLAND TRAMWAYS CO.

Auckland Star, Volume LI, Issue 40, 16 February 1920, Page 2

AUCKLAND TRAMWAYS CO.

MEETING OF SHAREHOLDERS. A meeting of shareholders in the Auckland Electric Tramways Co. was held in the Chamber of Commerce hall at nexm to-day. About seventy shareholders were present. The meeting had been convened by Mr. C. G. Tegetmeier, chairman of directors, to afford him "an opportunity of conferring with local ordinary shareholders with regard to the course to ho atlopted in tlie future." Mr. Tegetmeier occupied tbe chair, I and in introducing the business, stated 'this was ne.t a meeting of the company, | and that no effective resolution could ;be passed except at a meeting of share- | holders convened in accordance with the j company's articles of association. He ] proceeded to explain the, terms on which the undertaking of the company had been acquiretl by tlie Aue-klanei Corporation, which took possession on July Ist last. The amount payable by the Corporation was £1,227,200, which the company will receive in debentures for £534,400 hearing interest at five and aquarter per cent, and debentures for £392,800 bearing interest at fr»e per cent. The whole of the debentures are payable on the Ist July, 1340. These debentures constitute the sole assets of the company, and the question to be considered was how they could be dealt with in the best interests of the shareholders. The outstanding etebentarne stock of tlie company amounted on Jane 30th last to £374,088, which is redeemable by the company on six months' notice at £105 per cent. On the liquidation of the company the repayment of the debenture stock at this price will become an immediate liability. There were also cash liabilities of a considerarhte amount. The only source, from which funds to discharge these liabilities e-orrM be obtained was by realising corporation debentures. The preference shares of the company amount to £150,000, and these shareholders are entitled to "repayment at par, and to interest at sir per cent, until repaid. After satisfying the claims above enumerated, the remainder of the company's assets would, in liquidation, be divisible among thr» ordinary shareholders. The orelinary shares amount to £450,000, of which, approximately £-220,000 is held in laadon. and of the balance of £230,000 an the Colonial Register many holders re» side in dfierent parts of New Ze-ahtod, and some in Australia. The question, to be determined was, whether the company should continue in being and distribute the intereist whicli it received, or eUouH preweed to immediately liquidate. In carrying out. any liquidation the li«_n»dator would be bound to observe w*_tt« define-el legal principles. It had been suggested tliat the Corporation debentures should be distributed among' tiie shareholders. PersonaJly he thought it would be a very desirable thing- if thfe could be done. But the proposal ittvolvenl difficulties. Any scheme of distribution must be appiicable to all shareholder.?, and would have to be approved by the necessary majority at a meeting convened for that purpose. The directors were very largely interested in the ordinary shares, and were desirous that the best practicable course for fcne whole* of the shareholders should be adopted. They bad formed no definite views regarding the winding-up of the company, but he reminded shareholders that immediately the company goes into liquidation the control passes out of their hands, and they can only urge their views and the views of other shareholders upon the liquidator. Mr. Francis Hull stated that he -was i expressing the opinion of nineteen-tweit-tieths of the local shareholders in suggesting that the corporation deebntures should be issued in hundreds and twentyfives, and distributed among shareholders in satisfaction of their interests, cm the basis of 25/ worth of debentures for every pound's worth of shares. He said that many persons, including trustees, had purchased shares upon the distinct understanding that they -would be ea- : titled to take up corporation debentures ; in the proportion mentioned. > Mr. Tegetmeier 6aid that the deter*-* ■ tures were issued in hundreeis only and at very large proportion of the 6hart*no_e__*i*_. represented very small holdings. Hr» . couhl not see how the liabilities of thrt , company could be defrayed, and <__c ___■ r terest of these small shareholders satis- , tied, without selling the debentures. Mr. Buttle referred to the fact that t» i throw such a large amount of debentures ' upon the market at one time would i»* . evitably result in serious depreciaticn*. . whereas a much better price Tvonld be realised if the share-holders were able to take up these debentures in liquidation of tiieir interests. Mr. Edmiston spoke in the same direction, ile pointed out that even if tbe " debenturco were offered upon the local market, shareholders who desired to take them up might not be in a position to t do so unless they could apply their in- , terests in tiie Tramway Company to that c purpose. Mr. Tegetmeier stater it was intended - to test the local market b\- leaving a t batch of live and a quarter per cent. i corporation debentures for disposal in i. New Zealand, with a minimum of *"18. r After further discussion it was _. unanimously resolved, on the moticn of i Mr. T. VV. Leys: -That the sharei- hoh.ers present at this meeting recoror mend (li that the company shall be wound up as spccdilv as expedient; (2) , that, in distributing the- assets of the p company, the liquidator be- reeptesteei, .. if practicable so tn do, to propose a s scheme- whereby tbe debenture's of the Auckland Corporation be elistributed j among the shareholders oi the : company.*' _ j Tlie chairman stated tliat while he l ; could not accept this as a formal resolu- _ tion be would convey it to the board of directors in London. Personally he _ j was in sympathy with it. ami. as repreB j senting very large orelinary share S-. interests, tlir- directors were desirous of I realising as high a price as possible for the company's assets. c A vote of thank' to tlie chairman i. terminateel tlie meeting. S, ■c r^^^^___^^___________