'PURCHASE BY STATE

Evening Post, Volume CXXVII, Issue 111, 13 May 1939, Page 9

'PURCHASE BY STATE

DECISION IN BRITAIN

IMPERIAL. AIRWAYS'AND BRITISH AIRWAYS

TERMS ANNOUNCED

(By Telegraph—Press Association— Copyright.)

(Received May 13, 9.30 a.m.)

LONDON, May 12,

The Secretary of Air, Sir Kingsley Wood, announced in the House of Commons that the Government is prepared to take over the assets and liabilities of Imperial Airways on the basis of paying the shareholders •32s 9d for each ordinary pound share. The total involved was £2,659,000, on which interest would be allowed at 4 per cent, to March 31; and also the assets and liabilities of British Airways, on the basis of approximately 15s 9d for each pound share. Amalgamation would follow the shareholders' acceptance of the terms. Mr. E. Shinwell (Labour) criticised the offer on the ground that it was too generous. Imperial Airways shares had been quoted yesterday at 29s 3d, and British Airways shares were unquoted. An extraordinary general meeting is to be held on May 22 to approve the Government's offer. It is stated that the past year's results do not permit of a dividend exceeding 4 per cent. On November 11 last, Sir Kingsley Wood announced in the House of Commons that the Government proposed to recommend legislation for the purpose of establishing a public corporation which would contwol Imperial Airways and British Airways. They had come to the conclusion, he said, that in the light of the large subsidies paid to the companies and the conclusions of the Cadman Committee (which inquired into the position and reported last year, strongly criticising the equipment, operation, and personnel of the companies, and which had recom-1 mended that the dividends of subsidised concerns should not exceed public utility rates) it appeared desirable to ensure that the large additional capital needed should be raised on terms which would -not be disadvantageous to the Exchequer. The Government had therefore decided to associate the two chosen companies in a public corporation, and would fix a "fair and reasonable price" for each undertaking, which would be submitted to the shareholders for approval.