FOREST PRODUCTS

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

FOREST PRODUCTS

Big New Company Formed DETAILS OF PROPOSALS In accordance with the authority given by the Bondholders Incorporation Commission a new company has been registered in Auckland, having for its main objects the realisation of the pine forests created in the Taupo, Putaruru and Rotorua districts by New Zealand Perpetual Forests. These forests have been planted and maintained on belinll of bondholders by New Zealand I erpetual Forests, Ltd. The new company which is to be known as New Zealant Forest Products, Ltd., has a nominal capital of £11.000.000. so that it may be described os the most ambitions iiidu> - trial enterprise yet attempted iu the Dominion. Close on £4.000.000 has,. during the past ten years, been paid m by bondholders, and they are to receive for their bonds shares in the new coin pan r The shares will be of a par value ot tdU each, and in the allotment provision wiJ be made for the different valuations of various classes of bonds. The articles of association set forth that the original capital of the company is £11,000,009, divided into 5.000,000 preference shares of £1 each and li 0.000 ordinary shares of £3O each. The statutory meeting of the new company has been called for March 23. Iu a circular just issued to shareholders the secretary of the new company. Mr. R. H. r Smythe, quotes from the explanatory memorandum annexed to the Companies (Bondholders Incorporation) Bill when it was introduced to Parliament as follow : — , . “This bill arises out of the report ot the Companies Commission in so. far as it relates to bond-issuing companies. It is intended to remove certain difficulties that have been experienced or are contemplated in realising on behalf of the holders of such bonds the products affected by the bonds. Bonds have been issued by approximately 50 companies that arc now operating more or less activelv. and they relate to tobacco, citrus fruits,'flax, tung oil. or timber. In almost all cases the bondholders are represented by trustees, upon whom the duty of realisation ordinarily falls. It was shown to the satisfaction of the commission that realisation schemes could r.ot effectively be carried out by the trustees Further,- the trustees for one issue of bonds have no power to combine with the trustees for other issues in carrying out a joint realisation scheme. In certain eases it is necessary for economical and efficient working that there should be such combination. The commissioners considered it to be desirable, too. that the bondholders should have a greater measure of control over realisation than m possible without their incorporation. Removal of Difficulty. With a view to removing the difficulties referred to above, the bill provides in the first place for the incorporation of the bondholders of any bond-issuing company into a limited company. . To ensure that this is effected upon, equitable basis’, the conversion of bonds into ehares will be under the supervision of a commission of three persons to be appointed by the Governor-General. The company’s circular adds: — “For the information of shareholders there is attached hereto an extract from the explanatory memorandum annexed to the Companies (Bondholders Incorporation) Bill when it was introduc'd to Parliament. It will be noted that, if any bondholder objects to exchange, his bonds for shares he should make. application to the commission for the reinstatement or his ‘bonds. Nevertheless, it should be pointed out that the whole design of the creation of the commission has been to protect the interests of the bondholders and that holders of reinstated bonds will only be entitled to undivided areas or forest land, with no provision made for the harvesting of the trees beyond what the individual bondholders can arrange amongst themselves. . “After the statutory meeting of the company it is intended that a further application will be made to the commission to combine the various classes in order to facilitate the realisation of the whole of the company’s forests as a composite undertaking. To effect this provision has been made in the order for incorporation, made by the commission, to enable the issue of further shares to represent the additional value of each year’s growth, or to make such othei adjustments as between issues as may be found necessary. This additional value if> left for determination by the commission at a later date, when more definite data relating to growth, markets, etc., is available. . ... “Of the £5.900.000 of authorised capital unissued, probably 1.700,000 £1 preference shares will be offered at par to the owners of the ordinary shares. From the numbers and persistence of the inquiries received it is anticipated that the whole of this pfelerence capital will be thus subscribed. The new compani should, therefore, be in a position to commence operations owning an .unencumbered asset well worth the capital, r<’Pr ( ’’ sented and with more than HjjOO.OOO subscribed for development works and the establishment of manufacturing industries. , r “The provisional directors are: Messtfe. W. Fraser. H. E. P. Bracey. R. D. Kennedy and H. Landon Smith.”