WAIRAKEI LIMITED

Evening Post, Volume CIX, Issue 130, 5 June 1925, Page 6

WAIRAKEI LIMITED

ALTERATION TO SHARE ■ ' CAPITAL FINALITY TO LITIGATION. <Bi lELE3RAPU.—SPECIAL TO rHB POST.) AUCKLAND, This Day. At the extraordinary meeting of shaveholders of Wairakei Limited yesterday there was an attendance of about twelve, the chairman of directors, ' Mr. H. Reimers, presiding. Among those pre-' sent were the Hon. G. \Y. R. Maedouald, of_ Sydney, and Mr. A. Cleave, both of whom have taken a prominent part in the affairs of the company. The object of the meeting was to consider a proposal that the capital of the company be reduced to one-half. A report for the information of shareholders, printed on a circular contain-' ing the resolution. tp:ether with the balance-sheet for seven months up to olst January. 1925, showed that the takings for the period amounted to £8640, an increase of £1540 on the corresponding seven months of the previous year. The increase had been maintained during the ensuing two months, so that the total increase for the nine months was £2409. The directors said they were glad to state finality' had been reached on the question 'of litigation, and an agreement had been arrived at by which all differences had been settled by the payment of £150 to Mr. Cleave, who had abandoned all further claims and withdrawn his appeal to the l'rivy Council. With the aid of Mr. Cleave as a guarantor, the ■ directors had been able to obtain an advance to the limit of the £6000 overdraft from the bank. Mr. Cleave held the company's debentures to a nominal value of £8000, and the directors'.had agreed to pay him 2 per cent, per annum on the average amount of overdraft in' consideration of the guarantee.. 'The report added: "In justice to Mr. Cleave, it might be said .that the statement made at last meeting accusing Mr. Cleave of holding up Christmas orders is not correct. Your directors hold proof that. Mr. Cleave had nothing to do with this, nor was he a party to the holding up of such orders. As a' matter 'of fact, when Mr. . Cleave heard the order for Christinas requirements had been held up, he gave his personal sjuarantee to merchants in whose hands the order had been placed." , The resolution prepared for consideration of shareholders was as follows:— "That the capital of the company be reduced from £100,000, divided "into 100,000 shares of £1 each, to £50,000 divided into 100,000. shares of Is each, and that such reduction be effected by cancelling the capital which has been lost or is unrepresented by available assets to the extent of 10s per share upon each 0f<67,546 shares which have been issued and are now outstanding, and by extinguishing the liability in respect of uncalled capital to the'extent of 10s per share, and by .reducing the nominal capital from £1 per share, to 10s each per share; but such reduction to be' without prejudice to the company's right to sue for and recover all arrears of calis now outstanding and due in respect of said shares or any of them." In moving the adoption of the resolution, the chairman said that in the opinion of the directorate it was essential that the capital of the company should be reduced by half. He thought all would agree with him that to carryforward, a largo credit-balance on profit and loss account was bad policy, and the sooner the .situation was faced'boldly the better. The carrying of the resolution, he. said, would' in no way affect the intrinsic value of the shares, as they would still have behind them the same assets as before. It was also the opinion 'Of tha directors; continued the speaker, that.^ certain improvements should be carried out, and that the financial condition of .the company should be put. on a. sound and permanent footing. . If the resolution was carried the directors proposed to lay before shareholders at the next annual meeting a detailed programme of improvements. The. motion was seconded by Mr. F. W. Stone, a. director. ' Mr. Mac Donald asked how the directors proposed to adjust the assets. Tho chairman said the directors had not yet considered the • matter. However, if the meeting desired to give the directors some direction, he -would be pleased to have.it. : , ' After some further discussion. Mr. Mac Donald moved as an amendment that it be an instruction to the directors to adjust the assets by writing off: (1) on buildings an amount not exceeding; £2500, (2) the whole of the debit on the profit and loss account (£10.379): (5) an'amount not exceeding £1500 off'the general assets, and (4) the remainder (£19,394) off the property account. The chairman accepted "the amendment as an addition to the motion. This was agreed to. and the motion was carried without' dissent.