SHIPPING MERGER

Dominion, Volume 29, Issue 80, 28 December 1935, Page 14

SHIPPING MERGER

ohaw, Savill and Albion Line FURNESS, WITHY DEAL Control Now Complete The announcement from London that control of the Shaw, Savill and Albion Co., Ltd., has now passed to 1’ urness, Withy and Co., Ltd., as a result of a £1,500,000 deal giving the latter firm the remaining two-thirds control of the ordinary capital, brings the Shaw, Sat ill and Albion Company completely within the strongest shipping group in the wor.d. The latest “deal” represents the virtual completion of the move made by Furness, Withy and Company in 1933. It was announced on May 23, 1933. that Furness, Withy and Co., Ltd., ami their associated company, the British Maritime Trust, had acquired a substantial share interest in the Shaw, Saw and Albion Co., Ltd. Mr. John Macmillan, who has for over Q 8 years been identified with the Shaw, Savill and Albion Company, aa manager, general manager and managing director, in May, 1933. resigned the chairmanship in favour of Lord Essendon, chairman or Furness, Withy and Company, but continued as managing director. Thus, as from May, 1933. the ordinary shares of the Shaw, Savill and Albion Company have been held by the, n lute Star Line. Oceanic Steam Navigation Co., Furness Withy and Co., and the British Maritime Trust. The two last-named concerns have large financial resources. Furness, Withy increased their capital oy £2,000,000 in 1931, when the chairman emphasised that the increase would enable acceptance of favourable opportunities of expanding their interests. The 1933 “Deal.” Commenting on the 1933 deal, the Economist” of May 27, 1933, said that the Shaw, Savill and Albion Company, “which has an authorised capital pi £700,000 and an issued capital of £390, i all in equal amounts of 5 per cent. ‘A’ preferred and ‘B’ ordinary shares of £5, attracted Lord Kylsant’s interest during his ‘expansive’ phase. Practically all the issued ‘B’ ordinary shares were held by White Star Line Ltd. and Oceanic Steam Navigation Co., Ltd. It is understood that neither holding is involved in the deal, but that the ‘B’ shares taken over by Furness, Withy represent part of the hitherto unissued capital and will bring new money into the business.” To-day s cable message indicates . that Furness, Withy have now acquired the White Star Line and Oceanic Steam Navigation holdings of Shaw, Savill and Albion shares. Furness, Withy and Co., Ltd., represent the strongest group of interests in the British mercantile marine and great importance to New Zealand attaches to the developments announced in the cable m< When it was announced in 1931 that Furness, Withy contemplated a £2,000,000 ordinary share issue, it was at once assumed that the company foresaw an exceptional opportunity to acquire new tonnage and connections at bargain prices, said the ‘‘Economist.” The company s entire history suggested that the new issue was a portent of decisive developments. Furness, Withy had always shown exceptional judgment both in buying and refraining from buying other interests. Some of its most profitable subsidiaries were bought before the war well under par. Its holdings of £1 shares in the Neptune and the Norfolk and North American Companies, for example, were understood to. have cost 4/- per share. It paid £lOO,OOO for a holding of over £400,000, at par, in Moulder Brothers, and 10/- per £1 share for its interests in the British Empire Transport Company. Other acquisitions had been proved, by experience, equally well advised. The British Maritime Trust —control of whieh was obtained in 1908—had paid Steadily 6. per cent, post-war dividends, without taking undue risks. The Economic Insurance Company had been a consistent profit-earner and had succeeded in increasing its dividends in the depressed period 1930-31. The group ,at one time had owned collieries, ironworks and engineering properties, but had opportunely disposed of them before the post-war depression in the heavy trades became acute. It had avoided the fatal mistake, made by many of its competitors, of rushing into big building programmes.at post-Armjstice inflated tonnage values. Its wisdom in refusing to pay the price demanded for the-shares of the Oceanic Steam Navigation Company in 1926 had been amply vindicated by subsequent events. Although the ordinary shareholders had received a 100 per cent, capital bonus in 1919. the increase in the' parent' company’s assets from £5,308,000 in 1910 to £10,987,000 in 1931 had been financed without obtaining •i penny of new capital from outside. A 1931 valuation by the company’s officials showed a margin of £6.000,000 of net assets over the company’s issued ordinary share capital of £4,000,000. Furness, Withy Interests. Furness, Withy and Company’s widespread interests are shown in the following list of its chief associates and subsidiaries as at the beginning of May, 1933

In March, 1933, there was announced the sale by the Australian Government of the vessels of the Commonwealth Line, originally purchased by the White Star Line, to a British group beaded by Lord Essendon, chairman of Furniss. Withy, and Company. The ships, purchased under Lord R.vl<ant’s auspices for £1,000,000 _ in 1925, had come again into the possession of the Australian Government owing to the White Star’s inability to meet instalments. The ships had been managed by Shaw, Savill and Albion Company, Limited (in which White Star Line owns a large share interest), and operated as part of the Shaw, Savill fleet. “Shaw. Savill are understood to be putting up part of the money for the purchase, and this working arrangement will continue." said the ‘•Economist’’ of March 25. 1933. “A new interest, however, will now share _ the ownership of the vessels, for the Peninsular and Oriental Company is also putting up part of the price.” The Shaw. Savill and Albion Company, Ltd., m the oldest shipping company in the New Zealand trade, and has been associat-

ed with this country for three-quarters ol a century. The company in 1933 bad a paid-up capital of £390,750, and there were debentures of £540,000. and reserves amounting to £600,000. The company some years ago took over the fleet of George Thompson and Co.. Ltd. (Aberdeen Line). In September. 1934, it was announced that, owing to changes arising out of the North Atlantic merger of the Cunard and White Star interests, the Shaw, Savill and Albion Company had acquired the Australian business of the Oceanic Steam Navigation Company. Ltd. (White Star Line), together with the steamships Ceramic. 18,495 tons, and lonic, 12,352 tons. The fleet of the Shaw. Savill and Albion Company now numbers 27 steamships and motor-ships, aggregating 254,137 tons gross register. The fleet includes the three fast motor-ships Waiwera, Waipawa. and Wairangi, each of 10,780 tons, built in 1934-35,

I Debentures, Paidmortgages, up capital. etc. Pref. £ Ord. £ Furness Withy & Co., Ltd —— 1,500,000 0,000,000 British Maritime 6,000,000 Trust. Ltd. ... 150,000 —•- Economic Insur250,000 ance Co., Ltd. .. — — Warren Line (Liv434,280 crpool), Ltd. .. Norfolk & North 130,200 — American S.S. 800,000 Co.. Ltd 520,000 — Houlder Bros. & 800,000 Co., Ltd 125,000 100,000 Houlder Line, Ltd. — 225,000 550,000 British Empire Steam Naviga550,000 tion Co.. Ltd. . — — Empire Transport 100,000 500,000 Co., Ltd —— Furness - Houlder Argentine Lines, 800,000 Ltd —. — Manchester Lines, Ltd — •157.720 445,200 Neptune Steam Navigation Co., 235.802 400,000 201,732 1,200,000 Ltd. Johnston Line Ltd. — Prince Line, Ltd. 840,000 —— 1,202,090 Rio Cape Line, 600,000 Ltd 790,992 British & Argentine Steam Navi375,002 gation Co., Ltd. 85.050 — Cairns. Noble & 50.000 Co.. Ltd — —— Furness' (Far 12,500 East), Ltd. .. —— — Bellamy's Wharf 100.000 and Dock, Ltd. — 53.102 H. Clarkson and Co.. Ltd Danube Navigation Co., Ltd. . — — 61,625 74,900 *674,500 f!49.800 *Pref., ord. fDef., ord.