CBA plans 1:10 bonus issue

Press, 10 December 1983, Page 24

CBA plans 1:10 bonus issue

PA Auckland CBA Finance Holdings, Ltd, has announced plans for a one-for-10 bonus issue of ordinary shares to be made in March, Government regulations permitting. The bonus, the first the company has made since a one-tor-10 issue in 1981, was announced at the annual meeting by company chairman, Mr T. Marcus Clark.

The board plans to make the issue on March 20 to shareholders on the register at 5 p.m. on March 6. It is subject to Government regulations which are expected to expire on February 29. The bonus shares, to be declared from the share premium account, will participate fully in all dividends declared subsequently.

Mr Marcus Clark said the company's gearing was now nine-to-one, and it was aiming at 14-to-one in the current financial year. It was considered appropriate for a merchant bank to have a gearing of 20-to-one. He said that if the Government regulations were continued past the end of February the board would have to reconsider the bonus issue and decide whether to delay it or to make a cash issue. Mr Marcus Clark told shareholders he believed that during the coming year the company would concentrate on the competitive servicing of customer needs. With the company’s strong liquid reserves, he expected to announce another substantial profit increase in a year.