Govt To Guarantee Dairy Board Bonds

Press, Volume CVIII, Issue 31728, 11 July 1968, Page 28

Govt To Guarantee Dairy Board Bonds

(New Zealand Press Association) WELLINGTON, July 10. Government measures to assist the dairy industry to raise capital for essential plant expansion and modernisation were announced today by the Minister of Finance (Mr Muldoon).

If the Dairy Board wished to proceed with a further issue of dairy industry development bonds later this year, the Government would be prepared to guarantee the bonds, subject to agreement on the amount, terms, and timing of the issue, Mr Muldoon said.

The Government would also, promote legislation at this Parliamentary session to make any Government-guaranteed securities eligible for the investment of trust funds. PUBLIC ISSUE

Mr Muldoon said that earlier this year the Dairy Board raised nearly $6 million from a public issue of development bonds without the assistance of a Government guarantee and trustee status. This was a reflection of the basic soundness of the security offered by the Dairy Board, he said. Trustee status would, however, open the bonds to a considerably wider field of potential investors, including trust estates within the industry. The Government's decision had been made after representations from the Dairy Board, he said. PAYMENTS DOWN

Falling overseas prices for dairy products will mean a reduction in payments in two seasons, totalling about $260,000, for the 138 suppliers of the Opunake Dairy Company, ''which runs New Zealand's largest cheese factory. At the company’s annual meeting yesterday the butterfat payment for the 1967-68 season was set at 36c per lb,

2.482 c less than in the previous season. The chairman, Mr J. S. Hickey, who is a member of the Dairy Board, said that the

decrease for the 1967-68 season represented about $lOO,OOO. Prices were still deteriorating, and the company estimated that the payout for this coming season would be down a further $160,000. This was a terrific drop, he said. The decrease throughout Taranaki alone would total millions of dollars when applied to other dairy companies.