FREEZING WORKS

Press, Volume LXV, Issue 19644, 13 June 1929, Page 11

FREEZING WORKS

AMALGAMATION PROPOSALS. jaßSOLirnoN in favour NOT CARRIED. A LIVELY MEETING. *Wth Canterbury Sheepfarmers' Iratire Freezing Company atextraordinary general mec-u the Caledonian Hall yesterday ** " a t which the proposals to SCte with the Canterbury S*, Meat Company were considered. the prooccdins, wore inclined tbe boisterous, much so was it at Juncture that a disgusted sharejjFar-. -d .said: "I would like to ST. question now: Is tins a meeting J,uppo«d human beings or a hordeThe special resolution submitted was for over two hours and was lho voting was:— for the proposal ••■ -M6O Lainst the proposal .X>A. . ft required a three-fourths majority . Lrrv the resol.it.ua and the votes J favour were 806 short of the required number. , «* B ir, G jj Greenwood, chairman or Actors of the- company, presided, Jjlu the other directors were pre--18, 1" The Position Explained. -foe chairman said that he was ex - b«ely gratified to find such an inSiftl gathering. The question, to taonnsidered interested every freezing L»nv and, possibly, every proSZV throughout tho Dominion. He U been chairman of the rompsny X»it» inception; in fact he had been S«f the principal promoters of it. feihose davs there was a. particular Lrcity of space in the works and tho onpMiies then existing and ]ie felt, •turn* time, that it would be a blessing to the farmers of Canterbury if A had additional freezing works. In Mtjunction with the other directors JhW worked as hard as he considD«d necessary for any man to do. He id made two trips to tho Old Counts, partly on his own business, but ■MCipally on the company's, because finalised that the company's selling facilities were not all that could be desired. Ho knew the London auditions as well as those is New Zealand. He was tkirefore, no youngster in tho frozen Hit trade. Since the inception of the etapuy he had sold no fat sheep or tabs, except through the company. On iswal occasions when he had addressed them as chairman, ho had entreated ttom to support their own company, ui to send all their stock to Kaiapoi. Did they think that he was not intuited in Kaiapoi? He had got more interest in Kaiapoi than anybody. (Cries tf "Queition!") He was vitally inter«y in Kaiapoi —as much as any man pnmtt.' Ir James Carr: I thought that you Ut told your shares. You told us so toother day.

lie chairman said that there came .jfortlHuties to do thing! that one re-. pitted. (Laughter.) An Impartial Statement. 8 was Ms duty, Mr Greenwood eontimed, to state the material facts as toljr and clearly as he could and ik (tatement of facts would be strictly idpartial. As they knew, the company hi Seen in existence just over 14 years. All the provisional directors wore Canterbury sheepfarmers, and the prospeciw issued by thetn fairly set forth the fciin object of the company—to estabt& a company controlled by producers, wnjing on a safe business on co-opera-tin lines, to cope "with the demand, *|Hit at that time, for more freezing '■Altarage capacity due to the irreguWty of shipping, and to compete with IHtteering concerns with which the proft«r was faced. Three of the original pnrisional directors were present— Jfaws Courage, Mcßae, and himself. 8 wss with deep regret that after denttag so many years to the service of Jto company they felt it necessary— A, taaroholder: To resign! Tie chairman: To bring the present •We of affairs before the shareholders "4 ask for their direction in the pre•t crisis. Early Profits—then Losses. ' 'Jw company's success in its earlier l"n was due to the abnormal conditions **» prevailed during the war and JJW the commandeer was lifted. In *•> years they received about £BO,OOO «storage aloue. -A shareholder: That's old history. **■ have present-day conditions. Continuing, Mr Greenwood said that ' * tkoee. days there was no risk nor Sedation; all was plain sailing. ]j™a the commandeer was lifted con- ; Jwobs were totally altered. The comJJJ!" *as forced into either buying at ."■wife rates, or closing down their "*« altogether. r »*■• .aggregate loss as it appeared in :■» printed balance-sheets for the four 5J> ended September, 1928, was 2J; 187 13s 7d; latterly there- was inallowance for depreciation. *the past depreciation had been on ?wkis of £4OOO per annum; now 5* the works were getting older it •Jjjbeen suggested that that amount ** hardly sufficient. Information Withhold. JW knew that balance-sheets pub2** by public companies sometimes Fgjwld information which the shareJ"*™ and the general public had a 2* to expect. He had to admit that 2 onmpany's last balance-sheet was free from this fault; so 5* a> that, pending ;.n explanation ?* tiie auditors, he declined to sign r *yeu now it was not as clear as JWjua wish. The inference would be J*** <>y the ordinary reader that the 3*»« of £14,000 was invested some2** »nd available for a rainy day, ffJ*M that sum had no separate g™*«* and had been and still was 2? "sod in the company's ordinary S*? B - 'lTie reserve funds in 1920, jffi2j?S income-tax reserve, stood at Then and Now. Ij?* 11 the company was incorporqT* 1915 the killing capacity of all Jj?*jjttry freezing works was equal Hjfln Ureases per dav: it was now W"qsi consider a blv more than double. the available storage space « J?** 1 *° carcases; to-day 2" double, hj, view* of these facts jj!» Wuld safelv dismiss anv fear of concern failing to VW"* 0 <i«<>r for all stock sent m shareholders. They also could iVjrj* their minds of aiiy misgiving W*Jj* proposed amalgamation would «*L«* slightest effect on the price Us te'M- 'Cries of "Tell that to afc**nn*s" and "Where are you vour dividends?") Comhad Wome keener and While thsj constantly increasing

demand for concessions and the iiabitual disregard of the schedule W t T \ not thfc least of the difficulties wmen continued to ombaxass the weaker freezing companies. One aspect that must be carefully j weighed was that while the directors could speculate as they pleased with I taeir own money they owed a parai mount duty to exercise proper care and prudence in administering the v°M ey to them by shareholders, for whom they were trustees. There were absentees, widows, and c.iildren whoso interests must be considered. Unless facts could be adduced Pointing to a reasonable prospect of 1° wnapany converting an annual loss of £7OOO a year into a profit sufficient. to pay a dividend, the directors had no right to imperil more of the shareholders' money in a concern that had become a highly speculative business. He spoke with a deep sense of responsibility and perhaps with a fuller knowledge of the inner resources and workings of tho comnany than any other member. If shareholders were disposed to attach weight to his advice, based on the company's past history and the present condition of the industry, it would be for them to cut 1 -sses which could never be recouped and to linkup with a sister eomp«nv which was strong enough to cope with any opposition and which might be safely trusted to study tlm interests of the producer in every legitimate manner. What the Offer Involved. After referring to ihe resolution, the chairman said "if it. was carried <t would bo for the directors to decide which of the two offers would be in the best interests of the company. Mr James Carr: Will you read us the offer as confined in the Canterbury Company's r>roposal? (Hear hear, and applause.) Not a copy of it. Have you got it in writing yet? Mr Greenwood: I haven't asked for it. A shareholder: What's the good of it. Mr Carr: Have you got it—that's the question ? Mr Greenwood; I told you that I did not think it necessary to ask for it in writing. My reason was that I was not in a position to accept anything till crier this meeting. (Applause.) Continuing. Mr Greenwood said that there were r-tatcments in circulation that ns far as the Canterbury Frozen Meat Company was concerned the offer involved a sum of £ 13,000. That did not put the matter correctly. The C.F.M. offered £75,000 in cash and shares, the North Canterbury Company to liquidate its own debts; alternatively the C.F.M. Co. offered £43.000 in cash and shares, the C.F.M. to liquidate all the North Canterbury Company's debts. The effect of the acceptance of the £70,000 offer would be that if, after realisation of the North Canterbury Company's liquid assets, the company's indebtedness to its creditors was less than calculated, the amount available to shareholders would be greater than 30s per share; if the company's indebtedness exceeded the amount estimated, the amount payable to shareholders would be less than 30s per share. Amongst the benefits of amalgamation were that the North Canterbury Company would be saved the loss of last season and of tho present season, they would be relieved from the liability of £2 on each share, and they would be credited with 30s for each share held in the North Canterbury Company.

The Besolution. Mr Courage moved the following resolution : "1. That this company enter into a contract to be prepared or approved by its solicitors for the disposal of its property and business to the Canterbury Frozen Meat and Dairy Produce Export Company, Limited (hereinafter called 'the Canterbury Company') upon the terms mentioned either in sub-section (a) or sub-section (b), hereof, with such further terms and conditions as may be mutually agreed upon between the two companies. "(a) The Canterbury Company to take over the business, property, and goodwill of this company as a going concern as from October Ist, 1928, discharging all liabilities and outgoings from that date, and the expenses of completing the proposed transaction and to allot five thousand (5000) fully-paid £5 6 per cent, preference shares for distribution among the shareholders in this eompany, and to pay to the directors or liquidators of this company an amount sufficient to enable them to pay to the shareholders of this company in monoy and such preference shares and cash thirty shillings net for each share held by them respectively. "(b) In the alternative that the Canterbury Company take over the land, buildings, plant, machinery, business, and goodwill of this company for a price to be agreed upon, not being less than £75,000. payable as follows: fied iii sub-clause (a), and the balance in cash on completion, this company discharging its liabilities and outgoings to date of completion. "(c) The Canterbury Company to undertake to keep the Kaiapoi works in operation for a term of not less than two years from the date of the proposed contract. . "(d) The shareholders of this company to be relieved of all liability m respect of uncalled capital. "° That this company be wound np voluntarily, and that a liquidator be appointed for the purpose of winding up with authority to receive in compensation or part compensation for the transfer of the company's property nnd business, shares, policies, or other like interests in the Canterbury Cornpa nv for the purpose of distribution among the members of this company. Mr Courage said that they had all <*en the correspondence in the papers. (Cries of "One side only.") "I must a«k vou to fully consider the whole question in recording your votes and to use your judgment," he added. Cheers and Hoots. Mr H. D. van Asch rose to speak, and there were cries of "Is he a snareholder?" ~, , , Mr C. Mcintosh: Why did he buy up shares in the last few months to hap to liquidate the company? (Cheers and hoots.) . . Mr van Asch tried to speak ana was ''counted out," hooted, and cheered alternately. A voice: Is this a civilised meeting or a horde of savages? . Mr van Asch: "In the British Empire von can buv shares whenever you like if you pay for them." He seconded the motion and went on to say that after a full investigation he was amply satisfied that the salvation of the company would be amalgamation. An insistent voice: Why did you buy shares?

Mr van Asch: "You come into my office if you want to ask questions. I appeal to the chairman, and if you give me a chance I'm sure the meeting will vote in favour of allowing me a hearing. In anv case what are you all frightened of that you won't let me speak ?' : He stated that two essentials were needed to make a freezing works successful : (1 > Experts who had had experience in England, and (21 the turnover and quantity of stock going through. To make this company pay. Tip said, they must put through 300.000 carcases per annum (More cries of "Time.') He had been authorised by Mr D. J. Shea, to say that if the amalgamation eventuated the Canterbury Frozen Meat Co. would jrive a written guarantee that every shareholder would be s;iven storage and l-'lling cnnn"ity at nnv time. Mr Shea, said Mr van Asch, had received a cable from London during the week advising that owin<r to the weak selling of the North Canterbury Frozen Meat Co. —that was, Belling without

storing—th» market in London had been materially prejudiced. _ (Repeated cries or "lane s up" and "Let's hear both sides. ') Mr van Asch: 1 11 make it as short as I can. Voices : -No, time s up. Mr van Asch continued that after the amalgamation was mooted the shares rose to 20s. At this stage the interruptions became continuous, and Mr van Asch had difficulty in making himself heard. Mr J. Carr: Let him haTe three minutes to finish. Mr van Asch saia that the maintenance account should be bigger now than it was five or six years ago, and the actual position to-day was the reverse. There was no doubt that the amalgamation would be beneficial to farmers and shareholders. Mr J. H. Blaekwell said that so far no speakers had been against the proposal. A voice: That was their ideal "Personal Motives?" Mr Blackweil continued that by five tows to two the directors had 'stood by their word to the farmers and postponed consideration of the amalgamation for three weeks. Anonymous writers in the papers had not been backward in imparting personal motives to those against the proposal. It was ridiculous to say that Kaiapoi tradespeople were against it. Ho himself had assisted in the raising of £•20.000 to start the company. It had been said that he was interested in the directors' fees, but they were merely the same as given for any other ■similar company position in which responsibility was shouldered. Every director was elected by the shareholders because he had the confidence of the shareholders At the last shareholders' meeting he had taken exception to the fact that the intimate details of the company's affairs had been published in the public Press. The statement by the chairman that the company was on the verge of bankruptcy was most improper. No one had the right publicly to decry the company's position and depreciate the value of its assets. Was it any wonder that the price offered for the works was a scrap price, and the statements made had seriously prejudiced the value of the company. The exagj geration in each case of the figures quoted was always against the company. In one case the losses, instead !of being £22.000, should have been [ shown as £4OOO. The losses were not cash losses, but debits to show depreciation, and they did not affect the bank overdraft one iota. The company's banker had had no part in. attempting to force the amalgamation on the company. (Applause.) The works had been written down from £190,000 to £114,000. It was the practice of most companies to invest their reserves in their own trading, and if they had been paid out to shareholders the bank overdraft would have been much higher. It would not pay the company to call up its uncalled capital, because it would simply affect the company's bank credit. The amalgamation was equivalent to writing down half the capital. If they had to part with their meat on to-day's depressed price the losses would be considerable. The experts advised that conditions were hopeful. In view of the indications there was a reasonable probability of coming out of this year's working without a loss. Killings this year were in excess of last year m spite of all the campaigns to shut up the works. They had guarantees from the Producers' Committee of 130,000 head of stock to start the season, and there was more to come. That placed them in a verv much better position than ever before. Their concentration should be directed towards an elimination of risks as far as the selling end was concerned. He had received in writing a definite offer from a very large concern to take over half next year's stock at cost. " "As a director of this concern I Bay that we have already faced the losses of last year, and with the prospects ahead of"us shareholders would be.unwise to sacrifice their capital. There is every reasonable possibility now of receiving regular modest dividends. (Applause and cries of dissent.) Mr J. Carr said that he had never heard such a confession of inability as that made by the chairman. (Laughter.) The company was formed to protect the interests of the producers. Mr Greenwood was very anxious to get rid of the company. He should have been open and above board and produced his requisition before. "I appeal to you shareholders to give us a trial for a year. I hope you will all put your stock into the works this year," he added.

Increase of Stock? Mr Mcintosh said that there had been a hint of the Government taking the duty off wheat. If that happened it would increase stock. There was also the extension of. the Parnassus railway. The result would be a further increase in stock. If one works had to go out at the present time, why should it be the farmers' works? Mr Nicholls said that the Kaiapoi Freezing Company's capital was locked up in land, building, and plant. It had no liquid assets. It only needed one loss and the bank would force it to call up its capital, and the farmers would have to pay out. The C.F.M. Co. was a farmers' concern, had a reserve of £200,000, and liquid assets of £BO,OOO therefore, why not join together and make one solid concern? The Guarantees. A shareholder asked Mr Carr what steps could be taken to force people to carry out their guarantee; also, why blame should be put on Mr Greenwood for all the trouble, when there were other directors around. Mr Carr replied that the guarantees were in writing. A shareholder asked whether the £14,000 representing reserves was a liquid asset or whether it was only a book entry. Mr Blackwell replied that the bal-ance-sheet containing the £14,000 reserve was signed by Mr Greenwood and the auditors and spoke for itself. Mr V. Craw moved a vote of no-con-fidence in Mr Greenwood, and his two co-directors. As the meeting was a special one, the motion was not accepted. The Vote. The vote was then taken and took some time re count. Some of the audience waited to hear the result, but the majority had left after recording their votes. The result of the voting was announced as follows: — For the proposal .. 2450 Against the proposal .. 2026 The resolution was not carried, those in favour being 596 fewer than the required three-fourths majority. Under the will of his father, Sir Ernest Wild, K.C., Beeorder of the Citv of London, inherits a fortune of about £54,000. Sir Ernest's father. Alderman Edward Wild, retired grocer, of Eaton, Norwich, was a former mayor of that city. He died at the age of P7, leaving" estate worth £58,600. He bequeathed £4OOO to his niece, Margaret Storey Chamberlin, and all his other property to his son, Sir Ernest Wild. China exports tea in solid lumps, like bricks, for consumption in Tibet and Siberia. The tea leaves are pulverised, mixed with water, and moulded into hard cakes. The bricks weigh about olb each. In this form tea can be carried overland more easily, as it occupies less space.