Light Leathers to form association

Press, 23 October 1980, Page 19

Light Leathers to form association

Because of continuing fosses the directors of New Zealand Light Leathers, Ltd, have announced that it is forming an association with an international group with successful world-wide marketing associations. N.Z.L.L. incurred an unaudited pre-tax loss of $1.2 million in the six months to June 30, according to the directors in a preliminary report. This compares with a $52,578 loss in the same period last year. Heads of agreement had been reached with Amalgamated Products, Ltd, an associate of W. and R. Fletcher (N.Z.), Ltd. and a subsidiary of the Union International Company, to merge its tanning business at Hastings with that of N.Z.L.L,, the directors said. “This will afford N.Z.L.L. the opportunity to benefit from the world-wide marketing organisation of the Gomshall tannery subsidiary of the Union International Company, which is one of the major buyers of New Zealand pelts and which sells garment leather into all the world’s major markets.” The heads of agreement were subject to various consents being obtained, including those from the Reserve Bank of New Zealand, the United Kingdom Treasury, the Commerce Commission, the Examiner of

Trade Practices, High Court, and the shareholders. A shareholders’ meeting would be called as soon as possible to consider a resolution to reduce the capital of the company to reflect more closely the existing shareholders’ funds of the company. This will involve reducing the nominal value of the shares from 100 c to 50c. Subsequently it was proposed to issue 3 million shares to Amalgamated Products, and in addition to pay them $500,000 over a five-year period in exchange for the Hastings tannery assets.

The N.Z.L.L. directors and all con>orate shareholders had indicated that they supported the proposed arrangements and consider that

they are in the best longterm interests of the company. “The directors recommend that shareholders do not sell their shares until such time as full details of the arrangements can be sent out to all shareholders.” The latest loss reflected the difficult trading worldwide. It had proved impossible to recover high raw material charges and other costs when the leather market had been in a steep and unforeseen decline, the directors said.

"After this and previous losses it was essential to N.Z.L.L. that its future be assured by forming an association with an international group with successful worldwide marketing associ- 1 ations.”