Dairy Board To Float Loan

Press, Volume CVII, Issue 31409, 30 June 1967, Page 3

Dairy Board To Float Loan

(N.Z., Press Association) WELLINGTON, June 29. After discussions with the Government the Dairy Board has decided to raise capital required for dairy factory development by floating a public loan. The chairman of the board (Sir Andrew Linton) told the Dominion dairy conference in Wellington today that after discussion with the Minister of Finance (Mr Muldoon) the Dairy Board now must make the best arrangements it can to secure new capital from sources outside the Reserve Bank and trading banks The board considered the Government’s inability to increase availability of finance from traditional sources regrettable and had informed the Prime Minister (Mr Holyoake) of this view. A letter from Mr Muldoon

had said that the decision on finance for the industry was made in the light of present economic conditions. The board expected the Government to recognise that any measures taken now would be temporary. It was essential that capital should be made available for dairy factory expansion so that increased farm production could be converted for export.

Other Sources “The Dairy Board has, therefore, examined alternative sources of capital finance,” said Sir Andrew Linton. “These included borrowing from banking sources overseas, borrowing from life offices in New Zealand, and floating a dairy industry development loan ourselves.”

“The board has thoroughly examined all these alternatives. There are difficulties in respect of overseas finance that cannot be cleared up in the immediate future. We have had useful and cordial discussions with members of the Life Office Association but unfortunately their longterm repayment arrangements make it difficult for the board to accept loan capital on this basis,” said Sir Andrew Linton. “Urgent Need” “If the dairy industry now has to face paying commercial rates of interest for the capital finance it requires so urgently, we would prefer to offer the benefits of these interest rates to the industry and to the public of New Zealand,” he said. “I feel sure there are many people in New Zealand with sufficient confidence in the dairy industry for this move to prove a success. “We have the assurance of the Government that it will support us in this approach to our problem. The board has unanimously decided that we should explore this source of finance. “I cannot give details at

this stage because we are still making the necessary inquiries. But if the conference is prepared to support us in this approach 1 am sure we can make a sticcess of this effort to meet our needs for finance for the industry,” said Sir Andrew Linton. “At the same time we do insist that as soon as the present economic crisis passes, we should be able to return to our traditional sources of finance.”