COMPANY NEWS N.Z. FOREST PRODUCTS

Press, Volume XCV, Issue 28234, 23 March 1957, Page 13

COMPANY NEWS N.Z. FOREST PRODUCTS

First Dividend Approved

“The Press” Special Service AUCKLAND, March 22. A crowded and. long meeting of shareholders of N.Z. Fordst PRoducts, Ltd., today approved the directors’ proposals to pay a 10 per cent, dividend on ordinary shares in the form of cumulative preference shares, and concurrently. to alter the status of the existing non-cumulative 5 per cent, preference shares to cumulative 5i per cent, pre‘ference shares. The payment marks the first distribution to ordinary shareholders since the present company was incorporated in 1935.

The meeting lasted nearly three hours and 14 shareholders voiced their opinions. Considerable opposition to the proposals was expressed at the meeting, but the final voting disclosed that slightly, less than 90 per cent, of the voting shareholders were in favour of them.

The payment of the 10 per cent, ordinary dividend in the form of preference shares involved the capitalisation of £520,436 of the general reserve account and the profit and loss account. -The changes mean that the paid capital of the company is increased from £6,195,064 in 5,204,281 ordinary £1 shares and £990,783 in 5 per cent, non-cumulative preference shares to £6,715,492 in 5,204,281 ordinary and £1,511,211 5J per cent, cumulative preference shares of £1 each.

Sir David Henry, chairman and managing director, later disclosed that full utilisation of the forest would cost “the best part of £l2 million.” The company believed that it could find a market for larger quantities of pulp, especially bleached pulp. Long-term Finance The company hoped to secure long-term finance for the new projects estimated to cost £4 million, but it was impossible, because of the debenture trust deed limitations, to secure the full expenditure by debentures. He said obviously the company could not sell shares which were at present quoted below par, and it was essential to have company funds to raise further debenture money if the extension proposals were to proceed. The issue of preference shares was the best way readily available to the directors at present.