£11,000,000 CAPITAL

Auckland Star, Volume LXVI, Issue 3000, 19 December 1935, Page 8

£11,000,000 CAPITAL

PERPETUAL FORESTS. NEW COMPANY AUTHORISED. BONDS TO SHARE ISSUE. A sitting of the Bondholders' Incorporation Commission was held yesterday for tho purpose of finally considering an application by New Zealand Perpetual Forests, Ltd., and the Australasian Forestry Bondholders' Trust Co., Ltd., Tor an order incorporating the 'bondholders of the New Zealand Perpetual Forests, Ltd., into a separate company pursuant to the provisions of the Companies (Bondholders) Incorporation Act, 1034-3.3.. All .the . nierauers of the commission, which consists of Mr. J. S. Barton, S.M. (chairman), and Messrs. N. Duthie'ari'd J. B. Henry, were present. , An order for the submission of a scheme for the incorporation of the new company was made by the commission some' weeks ago and the hearing yesterday was for the purpose of finally approving the terms and conditions of the incorporation. The memorandum and articles of the new company were also submitted to the commission for its approval. Th'is application is by far the most important which has come before the commission, as the proposed 'company has an authorised capital of £11,000,000 and d list of shareholders running into 90,000 scattered in different parts of the world. The share capital which is immediately being: allotted to the bondholders is approximately £5,000,000, the balance of the share capital being available for development and other purposes of the company. At the hearing yesterday Mr. G. S. Kent and Dr. IT. A. Cunningham appeared for the Trustee Company, and Mr. ,G. P. Fjnlay for New Zealand Perpetual Forests, Limited. Extensive Operations. Mr. Kent referred to the many difficult matters which had to bo considered in determining the basis upon which the new company was to be formed. The fact that the company had so many shareholders, and Jho extent of, its operations, liad necessitated most careful and exhaustive examination into all aspects of the matter, and he desired to express the gratitude, of the Trustee Company to the members of the commission for the care and attention they had given to the nmtter, and the helpfulness of the suggestions which the commissioners had made during the consideration of tlio matter. Both the 'bond-issuing company and the Trustee Company had. found themselves in a difficult position owing to certain legal difficulties, and it had been found necessary to get special legislation to overcome these difficulties. His company appreciated how highly important it was that an efficient commission should be appointed to administer the provisions of the Act, and it .gave him pleasure to say that the personel of . the commission had' jnado the .. difficult task which, confronted the companies in formulating their scheme for incorporation a great deal easier, than might have been tlie case had they not had tlie advantage of the assistance of a commission, 1 tho members of whom had by their training and experience the necessary qualifications enabling tlie-m to deal with the matter satisfactorily*'.

He pointed out, of course, that the incorporation of the new company was only a first step in the matter, and important matters still remained to be considered. He felt, however, that the commission had now obtained such a thorough grasp of the whole position that jit would be able without great difficulty to deal with the further adjustments that would prove necessary to enable the company to operate in the way that is intended. The shareholders in the new company would have the opportunity at the statutory meeting of the company of electing the permanent board of directors, who would, -with the approval of the commission, consider and determine the final adjustment of .the various rights and interests of tlie shareholders. The Company's Policy. Mi'.- G. P. Finlay also stated that the bond issuing company was very satisfied with the work that had been plished. The bond issuing company had at all times worked in the closest harmony and co-operation with the trustee company, and at no stage had there been the slightest tension between the parties, as tho commission was well in a position to judge. The difficulties that Mr. Kent had referred to had all related to a very vital and important aspect of tho undertaking, namely, the question of realisation. N.Z. Perpetual Forests, Limited, had never at any stage taken the view that its interest ended in a mere completion of the purport of its contract with the bondholders. Its ' directors had consistently taken the view that their moral obligations extended to assisting the bondholders utmost of their ability to make the best realisation that circumstances would allow. His client company came before the commission actuated by a desire to serve the interests of the bondholders, and where there has been the slightest suggestion that any subordination of its interests might subserve the interests of the bondholders, the forestry company had been willing at all times to fall into line, and have its interests adjusted to any degree that might be reasonably necessary for that purpose. Commission's Findings. Mr. Barton stated that after full consideration of the scheme he was pleased to say that the commission was satisfied to make an order in terms of the application which had been lodged, and which would permit the immediate registration of the company. He stated that had the commission in the present case decided to sit as a special court, leaving the parties merely to submit their application in the usual way, as is done in connection with court matters, it would not have been possible to have adequately dealt with the position. He and his fellow commissioners had felt that, the only way in which the present application could be adequately dealt with was for the commission to sit in the first instance as a kind of conciliation council, which method had proved most effective. The excellent spirit which had been manifested by all parties had made that task very much easier, and he was satisfied that the result had justified the methods which the commission had adopted.

In conclusion, llr. Barton stated he would like to say that the commission had been impressed with the tremendous amount of work that had been done jn preparing the application and the skill and patience which had been displayed. He was' satisfied that nobody who had not made a study of the problem which had confronted the parties could possibly realise the magnitude of the task involved in formulating the scheme for, incorporation.