IN STERLING.

Auckland Star, Volume LXV, Issue 9, 11 January 1934, Page 9

IN STERLING.

INTEREST PAYMENT. SOUTHLAND POWER BOARD. «AIX QUESTIONS SETTLED." (By Telegraph.—Press Association.) WELLINGTON, this day. » In a message from Paparoa to-day tlio Hon. J. G. Coatee, Minister of Finance, announced on behalf of the Southland Electric Power Board that the board had decided that ail interest falling due to be paid in London by the board would be paid in sterling. The board has entered into an agreement satisfactory to the Government, and has given an unequivocal undertaking that all bondholders will receive their interest in sterling. All other questions between the Government and the board have been satisfactorily settled. The board's decision to pay 111 sterling was. in contemplation before the recent decision by the House of Lords in the Adelaide Electric Supply Company case was announced, and has not been influenced by that decision, which removed altogether any rights which the board may have had under the Broken Hill judgment. The Southland Board made arrangements for repaying the Government £8250 previously advanced by the Government to enable bondholders to be paid in sterling:. The board's, decision should remove for all time, the Minister stated, any doubt or misunderstanding in the minds of bondholders. Mr. C'oates also announced that he had made arrangements for publication of tlio board's decision in London. BOARD'S STATEMENT. BELIEF TO RATEPAYERS. 6 (By Telegraph.—Press Association.) INVERCARGILL, Wednesday. Supplementing the information contained in Mr. Coates' message, the Southland Power Board stated that London interest, plus exchange at 25 per cent, would cost the board £103,000 a year. Fortunately under financial arrangements recently made by the board that cost would be reduced approximately to £100,000. of which some £10,500 would be provided out of "excess overdraft. Prior to these arrangements, the whole amount of £103,000 had to be paid by the board out of revenue and rates, but in future only £83,500 need come from those sources. The board would now be able not only to avoid any increase in rates to meet the exchange, but would also be able to give immediate relief to ratepayers. The excess overdraft would be redeemed out of the sinking fund moneys in SeptemI ber 1936, at which time that fund I would bo in credit to the extent of I £40,000. | In September, 1036, the board had the [right to utilise its sinking funds to pay off portion of its London loan, and proIbably £350,000 of debentures would be | redeemed. The board also liad the option Ito convert the London loan in September, 193(5, when a considerable reduction in the annual interest bill could bo expected. It was stated that an extension of the State guarantee to the board's conversion loan could now be looked forward to, and guidance and cooperation from the Treasury and the High Commissioner toward a successful conversion could be anticipated.