ARMSTRONG WHITWORTH.

Auckland Star, Volume 304, Issue 304, 23 December 1926, Page 7

ARMSTRONG WHITWORTH.

UPROARIOUS MEETING HELD. PROPOSALS ACCEPTED. (Received 11.30 a.m.) LONDON, December 22. The shareholders of Sir W. G. Armstrong, Whitworth, Ltd., accepted the proposals for the financial reconstruction of the company at an uproarious meeting. Some of the shareholders declared that the directors had achieved a masterpiece of commercial and financial ineptitude, I resulting in thousands of shareholders losing their savings. Lord Southborough, the chairman, admitted that the old management deserved the majority of the strictures passed upon it, and assured shareholders that there would be no question of compensating the directors who were losing their seats. The debenture-holders also agreed to the proposed moratorium. The proposals put forward by a committee of experts to save the great engineering firm of Armstrong, Whitworth, Ltd. (which was unable to pay interest to its debenture-holders) were as follow: A request to the holders of 6$ per cent mortgage debentures and 5 j per cent notes to grant a moratorium for five years. All profits in the interval to be applied first in paying interest on these securities, which would give the company time to recover. The company to pay no dividends until all the interest under the scheme was first paid. A recent article in the London "Times" stated that the difficulties which Armstrong, Whitworth and Co., Ltd., have experienced are not confined to this firm. The plight of the big engineering companies has been, and remains, serious, but in so far as the difficulties can be remedied by reform of the management it is certain that they will be overcome. In December of last year the big firm of Vickers, Ltd., had to carry out a drastic scheme of reorganisation. The position disclosed by the accounts of Armstrong, Whitworth and Co. was more unfavourable than had been expected in Stock Exchange circles, and prices of the stocks and debenture issues suffered a sharp decline. The directors explain that the company's unfortunate position is due to adverse trade conditions, high costs of production and foreign competition. They also state that the estimated profit ou important contracts will not be realised, but that heavy losses will result.