EQUITABLE BUILDING

Evening Post, Volume CXX, Issue 148, 19 December 1935, Page 4

EQUITABLE BUILDING

TUKN W THE TIDE

FUTURE FULL' OF PROMISE

."At present the future is full of promise," said Mr. Malcolm Fraser, chairman and managing director at the special general meeting of shareholders of the Equitable Building and Investment Company'of Wellington, Ltd. The meeting was called for the purpose of converting the £10 shares ol the company into '£1 shares. There was a good attendance of shareholders. The chairman, in moving the adoption of the special resolutions, said he desired first on behalf of the directors to extend to all shareholders a cordial welcome to the company's offices. If this was not the first occasion ori which a general meeting of shareholders had been held at the company's own office it was certainly very many years since a meeting had been so held, and it was fitting, therefore, that he should extend to all a cordial welcome. As the owners of the company it was proper that they should have a close acquaintance with the premises where the business was being conducted on their behalf. • • RULES OUT OF DATE. "Well, -now, in regard to the special business for which you have been called together," Mr. Fraser continued, ,"the position is that the rules of the company are well' out of date, and badly require revision. This is a matter your directors have in.view to give attention to as soon as the reorganisation now being carried on is complete. In the meantime, however, the opportunity of acquiring the mortgage assets of the Wellington Deposit, Mortgage, and Building Association, Ltd., presented itself and negotiations to that end have been proceeding over the last few months. I am glad to be able to tell you that these negotiations have practically now been brought to a successful issue. It is part of the contract for purchase that payment is to be made in shares to such of their shareholders as elect to receive payment for their shares in that way. For this purpose it is essential that our £10 shares should be converted to £1 as it would not be practicable to arrange payment •with' £10 shares, as the size of the share would nullify the object in view. Hence the reduction is required ihvj mediately to facilitate this purchase. The alteration, however, in no way affects the position of our shareholders. One £10 share £7 paid up is precisely the same as ten £1 shares 14s paid up.' It is generally recognised, too, now.that a £1 share will be more,advantageous to the shareholders than £10, shares, as tending to render them more flexible and more readily markets able. Companies are practically never promoted nowadays with shares of a higher value than £1, and frequently less. As you are aware, the Equitable has .some 3000 £10 shares equal to 30,000 £1 shares of unissued capital, and it is intended to use some of these in the proposed purchase. ' mortgage Assets. "The mortgage assets are being taken over as from October 1, 1935, and the new shares so issued will rank for Equitable dividend as from that date. For, the Equitable Company it means an easy method of helping finance the transaction—it greatly strengthens the financial position of the company, and helps to preserve a proper balance as between assets and deposit liabilities. So far the indications are that not a great many will take advantage of this method—but even the few are welcomeand .helpful. ~l..want>you- torehieniberi ( However, that quite!, apart from the question of ttiis purchase the; proposed reduction of the : shares from £10 to £1 is in the:best interests of the Equitable Building and Investment Co. of Wellington, Ltd.". ' v • • ■:'■ "In regard to the absprptipn of the Wellington Deposit, Mortgage, and Building Association, .the particulars briefly are that the Equitable Company is purchasing the whole of the mortgage assets, subject .to the existing .'deposit liability of the association on what must be regarded as a reasonable and satisfactory basis. The total of their mortgage assets which the Equitable is acquiring amounts to over £50,700-7^6 deposit liabilities amount to £22,716-r-of iwhich approximately £8000 is now due—and the balance is spread in 1936 and 1937. In so far as possible arrangements are beihg^made with depositors, with a fair amount of success, for the extension of the due dates of these deposits into 1938, 1939, and 1940 on1 dates to harmonise with the due 'dates of: the present deposits held by the' Equitable itself. DESIRABLE SECURITIES. "With the, exception'of some five or six, outside Wellington, all the mortgage assets being purchased have been personally inspected by myself, in con> pany witb3 ; my co-director, Mr.' McEldowney, arid the secretary, Mr. Heyhoe, and.we can readily'say they are practically all of a most desirable type, being mainly cottage homes with mortgages of less than £1000-^-bearing rates of interest of 5: per, cent, and over— just the type of investment which this company desires. Altogether I think the transaction must be'regarded .as highly satisfactory to this company.

"It only remains for me to say in regard to the progress of bur own company that the inspection of the securities and reorganisation is proceeding steadily, and where necessary, satis-factory-arrangements are being made for' renewal of overdue mortgages; every endeavour being made to improve the position of those inarrear. In this connection the improvement, arid the.promising indications of further improyeriient in the general ecor riomic conditions of the country :is helpful' arid encouraging. This inspection of securities is the most important work in hand. It will take some time yet, but will be steadily pursued untir completed. The difficulty which we have had with our own depositors has been overcome, the due dates of deposits are well spread over the next three years, practically all are guaran

teed by the New Zealand Insurance Company, and for the next, six .or^seven years at least the financial position 'of the company is unassailable. There-is now no question whatever as to1 the strength and security of the company. The balance-sheet for the nine months to September 30 last shows sufficient profit to ensure that a dividend of, say, 4 per cent., for the year can be paid, and also allow for substantial additions to be made to the securities depreciation reserve. No less than £23,575 new advances have been made since the beginning of the year and applications for advances are being received in satisfactory numbers. "If only a sufficient number of fresh deposits were to be received the company could feel the setback of recent times was fully overcome, and again resume the full prosperous business activities of previous years. Best'rates of interest are offered and with the guarantee as to repayment of the New Zealand Insurance Company long-term deposits with this company provide an unequalled investment of undoubted safety and, security. .At present the future is full of promise; I now formally move -the first resolution, and will ask one of the directors to second the motion:". • • All the motions were carried unanimously. . ■ - : \'. •,■■-■■■ ■;■; DIRECTORS CONGRATULATED.' Sir Harold Beauchamp said he would like to remark, that tie felt certain all present would very greatly appreciate the work that had been.done by the directors in restoring, the position of the company. "It is very satisfactory to see that the shares are now practically back to par," he added. "The present purchase, on such favourable and satisfactory terms, will still further strengthen the financial position of the company. Shareholders are fortunate that;-.: in such difficult times the affairs of the company have been and are being so ably' handled and controlled. The wisdom of' the directors in -securing this additional block of business, and, arranging for such a strong backing from our good friends, The New .Zealand Insurance Company, Ltd., will be reflected in increased earning power and profits in the near future. Shareholders,. I em satisfied, will recognise the excellent work that has been done, and is being done, and,* in moving the resolution I am about to propose, I am sure I am giving expression. to the feelings of all present in this respect. "When I.'returned from England in 1932 this conipany was practically in a moribund condition, this being due to the action of the Government in restricting th> rate ol interest payable to depositors, and the lending rates to borrowers. Depositors becoming alarmed as to the future of the company, were withdrawing-their deposits as they became due, with the result that the bank overdraft ran up to £60,000 op thereabouts. It was then necessary to apply to the Court for a moratorium, which was granted. "The tide commenced to turn when the board decided to appoint as chairman and managing director one who could devote practically: all his time and attentionto the affairs" of the company, and the board was most fortunate in securing the-services of .Mr. Malcolm Fraser. I have no hesitation, in saying that the rehabilitation ot the company is due to the. ability he has> displayed in the carrying out of his onerous and responsible duties. At the same time, I would add that he- has been ably seconded.by his colleagues, and to them we accord our grateful thanks. I would now move:—That this meeting of shareholders congratulates the managing director .and his colleagues oh,the successful issue of their negotiations, for .thet,.acquisition of the andßuildmg"^Asso,cwtlon!s/Jmortgage' assets, and cordially^'approves of the^ ■purchase."? .. 'o:^~y'A.-. "■■■'- ■•■ - The motidn; was seconded by -Mr. WarburtonVand tarried ' This concluded to\Wteutt*s^;y " '

WHEAT PRICES

(By Telegraph—Press A«sn.—Copyright.) (Received December 19, 2.30 p.m.) NEW YORK, December 18. Chicago wheat prices, December delivery, 101J cents a bushel; May, 081 cents. New York cash, 130J cents.