CONVERSION LOAN.

Auckland Star, Volume LXIII, Issue 226, 23 September 1932, Page 5

CONVERSION LOAN.

POWER BOARD'S PROPOSAL. TO MEET MATURING DEBENTURES.

In order to meet its obligations to the City Council concerning two debentures, one for £500 and the other for £224,000. which mature on March 1 next, the Auckland Electric Power Board proposes to endeavour to arrange a conversion loßn on the London market, and in that manner to liquidate its obligation. Th,e debentures represent portion of those given to the City Council on the purchase of the undertaking by the board, and to cover the council's obligations in respect of the debentures issued by the council in 1912 and' 1914. In a letter from the Auckland Electric Power Board to the City Council it was stated that the board's accumulated sinkin* fund in respect of the two loans would t> mount to only £14,500 at date of maturity, and although the board had a certain amount of cash available in Auckland, it would be unable to meet the debentures in full. The board was anxious to avoid the heavy exchange which would be necessary in the transfer of any funds to London, and therefore proposed to arrange a conversion loan. "We are desirous, if possible," stated the letter, "of dealing with the existing debenture holders, giving them the option of taking fresh debentures in a new loan, but failing satisfactory arrangements in this direction, we shall have to place the loan on the open market. We feel sure your council will assist us in these negotiations, and we should be grateful if you would allow us to approach the debenture liolders with a view to putting cur conversion proposals before them. In the event of these negotiations proving successful, we suggest that debenture holders should be asked to accept debentures directly from us and so release your council of any further obligations in respect of these loans." The council decided to grant the request, subje-et to the form of letter to be sent to the debenture holders being submitted for the approval of the finance committee of the council.