CONCERN ABOUT TRUST DEEDS

Press, Volume CI, Issue 30004, 13 December 1962, Page 23

CONCERN ABOUT TRUST DEEDS

Moves By Aust. Exchanges ‘‘The Australian Associated Stock Exchanges have been concerned for some time with regard to the trust deeds associated with note and debenture issues.” the president, Mr A. B. Mellor, said in Melbourne last week. For some months sub-com-mittees have been giving attention to the irrtirodiucition of new listing requiremenite in respect to trust deeds. he said. The proposed requirements would be submitted to the Standing Committee of Commonwealth and State Attor-neys-Generail, for consideration and comment before being introduced. In addtion the stock exchanges may make recommendations on trust deeds which might best be introduced by legislation, he said. Recommendations It is understood that the proposed requirements and recommendations inctode:— That the borrowing company be required to report its financial standing more frequently to the trustee; That the relationship between the trustee and the company be cleanly defined; The clarification of the legal position where a group has a subsidiary company for the raising of term finance; A re-classification of securities distinguishing between those secured by a change over specific assets and those which have only a floating charge.

U.S., U.K. LOANS TO A.M.I. American Motors Corporation of the United States and Leyland Motors, Ltd., of Britain have agreed to lend £A584,796 to Australian Motor Industries, Ltd. The loan will be at 54 per cent, for up to five years.

Australian Motor Industries, formerly The Standard Motor Products, Ltd., reported a consolidated loss of £322,192 for the year ended June 30.

The lenders have the option to convert the loan into 5,847.960 "B” ordinary shares of 3s paid to 2s within five years. This would give them 58.8 per cent, of the ordinary voting rights, as the “B” shares would each carry a vote and rank equally with existing 5s shares for dividend and capital return on the amount paid up. The chairman (Mr S. W. Byrne) says in his address to be given at the company’s annual meeting on December 17 that under a further option, American Motors and Leyland could each take up another 3.000,000 of the new “B” ordinary shares at par. This would yield £450.000. Mr Byrne says that the loan would immediately allow high interest-bearing loans to be paid off. Savings made by continued reorganisation of activities had not been sufficient to permit profitable operations, but the operating loss had been reduced to small proportions. Directors expected to reach the break-even point in the near future.