THE LOAN AND MERCANTILE COMPANY.

Press, Volume II, Issue 8704, 29 January 1894, Page 5

THE LOAN AND MERCANTILE COMPANY.

THE RECONSTRUCTION SCHEME.

The following clauses in the scheme of arrangement of the New Zealand Loan and Mercantile Agency Company were not telegraphed to us on "Friday evening :— 18. The new Company may enter into any arrangements for settling, defining or deal * vng with the claims oi any of the creditors mentioned in clauses 16 and 17 hereof, and redeeming the Securities held by tbem apoa such terms as the new Company may think fit, including the issue oi prior Uen on " A ,: or"B" debenture stocks. Provided that every such arrangements shall he subject to approval by 1,1) the liquidator of the old Company until the liquidation is closed; (2) the trustees for the prior lien debenture stock when appointed, and until their apnovntmeut by the trustees lor the coniouI dated 4 per cent, debenture stock of the old Company ; and (3) the trustees for the "A" and " B " debenture stocks when appointed, and until their appointment the said Committee of creditors.

19. The new Company ahall pay to each creditor unsecured on cuneut account and unsecured holder of bills payable, upon which the old Coinpauy at the commencement of themudvns»-up was li&bYe as acceptor, or endorser, or under a contract to accept the same, £1210s per cent, of the amount of bia claim with interest at 5 per cent, per annum capitalised to Slat M&rch, IE&<V» on such portion thereof (if any) as carries interest in ctusb, ia four equal instalments o/ £3 2a 6d per cent, on lat April, 1894, let Octcber, 1894, Ist April, 1895, and lat October, 1895, with interest at 5 per ceat. per annum, upon the amount of such cash tor the lime being unpaid. For the remaining per cent, the new Company shall issue to each such creditor prior lien and "A" and "B" debenture stocks in the proportions of per cent., 25 per cent., and 25 per cent, respectively. \ 20. The new Company shall pay caoh creditor under £20 in cash, half within three months after the incorporation of the new Company, and half within.six months. 21. The new Company shall issue to eaoh creditor noO herein specially provided for "A" and "B '■ debenture stocks in equal moieties to an amount equal to his claim provablo against the old Company* , 22. Forthwith after this scheme shall have become finally binding on all parties, each creditor of the old Company shall, subject to the carry ing out of this scheme, hold his claim in trust for the new Company, and shall at the expense of the new Oomp&ny, release or deal with the same as the new Compauy directs. The new Company shall deal with such claims for the purpose of entitling them to enforce the call under clause 3, of insuring the carrying out of this scheme and preserving the relative rights and liabilities of the assenting and non - assenting shareholders. The trustees for the consolidated 4 per cent, debenture stock of the old .Company shall hold their security upon trust for the trustees for the prior lien and "A" and "B" debenture stocks according to their rights of priority as hereinbefore defined, and for the purpose of carrying out this scheme, and every shareholder aocepting shares in the new Company in accordanoe therewith shall be discb&rged from liability under any charge upon the uncalled capital of the old Company. 23. All sums received by the new Com* pany on realisation of freehold or leasehold properties, or mortgages or charges, shall, after payment of expenses and of any other moneys properly payable thereout, be paid to the trustees for the prior lien or "A" or *,* B" debenture stock, according to their rights of priority as hereinbefore defined. Three-fourths of such moneys shall be applied in redeeming the debenture stock of which they are the .trustees, and the remaining one-fourth shall be paid to the new Company and omploycd in the business. The whole net proceeds of sale of all shares in any Company held by the new Company shall be paid to the said trustees respectively, according to the rights of priority aa hereinbefore denned, and applied in redeeming prior lien and "A",and"B" debenture stock respectively, according to their rights of priority as hereinbefore , de* fined. ■ "

24. The Board of Directors of the new. Company may at any time apply in redeeming prior lien and _ v A " and "B " debenture stocks, according to their rights of priority as herein-before defined, such eume as they shall think fit, in addition to those to be bo applied under clause 23. 25. The trustees for the prior lien and foe the "A" and "B" debenture atocka shall in each case be two in number, and shall be remunerated by the Company. The first trustees for the "A" debenture atook shall also be the trustees for the "B" debenture stock, but in case any conflict of interests shall arise between th o *' A " ftndt "B" debenture stocks, separate trustees for the "B" debenture stock may be appointed. 26. As regards creditors who would become entitled hereunder to fractional parts oi £10 prior lien or 4, A" or *'B n debenture stocks, the etook representing each fractions shall be issued to the trustee? of these stocks respectively, and the creditors shall receive fractional eorip certificates. - " ... ■. ...'-: ■~ ■' ; ■ ;■.;, .. ■■•;-•■ v

27. The trustees for the "A " debenture stock shall have power from time to time to appoint one of themselves or eomo other person to be a direotor of the new Compaarp and to fill any vaoanoy occurring in the office of any director so appointed. : ■ 28. 8o longaa any prior lien debenture stock shall bo unredeemed no person ahull jbe appointed auditor of the new Company ' who shall be disapproved of by fche trustees for the prior lien- and "A" debenture Btooksot a majority o£ such trustees, &n& 1 thereafter by the trustees for the "A" and *' B " debenture stocks or a majority of sneh trustees. The auditor or auditors Iα addition to giving a general certificate shall also, so long as any of tho prior lieu debenture stock shall be unredeemed, certify each year whether, in his or their opinion, the profits of the Company admit of tho payment oi interest at the full rate of 6 per cent, per annum on the "B " deboature stock, and li not, at what rate (if any). The auditor oi auditors shall also furnish to the trustees for the prior lien and "A M and"B " debenture stocks respectively all ench information as they shall require concerning the affaire of the new Company, . ; 29. The trust deeds to secure the prior lien and "A" and "B" debenture atooke respectively and the memorandum and articles of association of the new Company shall contain all such provisions as shall be required by the trustees for the existing consolidated 4 per cant, debenture stock of the old Company and by the said commit* tee of creditors, and any difference shall b« determined by Mr H. H. Cozens Hardy, Q.C., or any other counsel aa may bo agreed on. 30. The Board of Directors of the Hew Company shall consist of not less than five nor more than seven members. No person shall be appointed a first direotor who shall be objected to by a majority of four persons to be nominated—two by the trustees fox the consolidated 4 percent*; debenture stock of the old Company, and two by the committee of creditors; and thereafter and ao long as any of the prior lien debenture stock shall be unredeemed no person shall be appointed a Director who shall be objected to by the Trustees for the prior lien, and '• A" debenture stocks or a majority of them, or thereafter by the Trustees for the "A" and •'B" debenture stocks or a majority of them. Subject as aforesaid, the Board shall be elected as may be provided by the articles of aeaociation. ■ ' —. ■ ■■• : ' : ; " ...•.■'

.31. If on realisation or valuation lor the purposes of a balance-sheet tho assets acquired and taken over by tho now Company shall bo found to exceed the amount given for the same such excess shall not be taken into account for the purpose of dividends, but shall to the extent of £240,000 be carried to a capital reserve. 32. No transfer of shares of the new Company shall bo allowed until, as regards preference shares they are fully paid up, or; as regards ordinary shares, the call of £1 Kr share provided for by clause 4 shall ye been paid or credited as paid, unless the transferor shall sign a proper document to make him jointly and severally responsible with the transferee for all calls up to £3 10s per preference share, and 2Ca per ordinary share. When the call of £1 per share is paid or credited as aforesaid, transfers of the ordinary shares may ba allowed to persons who Iα the opinion of the Board

of Directors of the new Company are responsible for the amount remaining unpaid on such share*. 33. This scheme is subject to such modification as the Court may require or direct to be made therein.

34. Unless within one month after sanction hereof by the High Court of Justice or Court of Appeal in England; the new Company shall be incorporated, and unless within one month after such incorporation or such further time in either case as the Court may approve, allotments of sufficient preference shares and ordinary shares of the sew Company shall have been accepted as aforesaid to produce not less than the sum of £500,000 when £3 10s and £1 per share respectively have been paid, and the first instalment of 10a and 5a per share shall have been paid thereon respectively, the liquidator may "within oae moath after the expiration of either of such periods, on the application of the Board of Directors of the new Company, or ot the trustees for the consolidated 4per cent, debenture stock of the old Company, or of the said Committee of creditors, annul the scheme, but in that case the costs hereinbefore provided to be borne by the new Company shall be paid out of the assets of the old Company.

Dated the 9th day ot January, 1894. Accompanying the scheme is a lormal notice convening a meeting on the 20th day of February, 1894, of the holders of tbe consolidated 4 per cent, debenture stock of th» Company secured by the trust deed of 4th August, the remaining creditors of the Company, and the contributories of the Company to consider and, if thought fit, approve of the scheme of arrangement. Proxies n-ust be lodged for New Zealand at the Auckland office, Quesn street, not later than Thnrsday, 15th February, 1894.