BROKEN HILL

Evening Post, Volume CXXVIII, Issue 56, 4 September 1939, Page 13

BROKEN HILL

NEW SHARE ISSUE • EXTENSIVE ACTIVITIES Following an announcement by the chairman of the Broken Hill Pty. Co., at the meeting- of ' shareholders on August 25, the chairman, Mr. H. G. Darling, said that the company proposed to make a new share issue. The shares made spectacular rises in both Melbourne and Sydney. In Melbourne values touched 55s Sd in the morning, which was a drpp of Is, but in the afternoon, when it became known that a new issue was to be made, the shares rose to 61s 9d, closing at 61s 3d —a rise of 4s 6d on the day. In Sydney, after being traded at 555, Broken Hill Pty. rose to 65s in the afternoon. In the course of his remarks at the company's meeting. Mr. Darling said: — 'Directors in considering the capitall required for extension of the business have had many discussions on the question of the price at which new shares should be issued. They have considered the advisability of par issues or a similar issue at a premium. They have felt the best interests of all concerned would be served in the long run by the latter alternative, and. as you know when new capital has .been required shares have been issued at a premium. There appears, however,'to be a general misapprehsnsion by the public about the percentage of profits on capital being made by the company. This is exaggerated by the fact that most of the company's shares have been issued at a substantial premium, and thus the shareholders have subscribed much more in cash to ■. the funds of the company than is shown in subscribed capital. The total amount of these premiums is now £4,459,790, and as this amount has been actually subscribed by the shareholders in cash, directors have decided it is desirable to issue shares for approximately a like amount. This will work out at about 64 Nshares for each 100 shares now held. Directors are considering the steps necessary to give effect to this decision. Since no part of this issue would come out of past profits., it would not be a bonus issue in the ordinary sense of the term. It will not enable the company to earn any larger amount of profits, and no greater amount will thereby be rendered available for dividend purposes. Further particulars will be advised to shareholders in due course." INCREASED DEMAND. The internal demand for iron and steel products had slackened somewhat following upon the big decline in value of Australia's primary production. Realising signs of this contraction, the management concqntrated on. the possibility of securing business in oversea markets. v Officers were sent abroad, and a thorough survey made of the possibilities, with the result that a valuable export trade had been built up in the Near East, where the company's products were giving every satisfaction. The company finally decided to open a branch office at Singapore, and a very useful business was being conducted from that centre. As shareholders were aware, the British steel works had been fully taxed in meeting the special and extraordinary demand for steel necessitated by the seriousness of events. Orders had been passed to the company by the British Steel Federation for certain sections of steel, which, fortunately, it had been able to supply. The diminished demand internally had been fully 'offset by the export orders, and it was indeed fortunate {hat the increased capacity had been available for the demand. • EXPORT TRADE. The export of irofi. and steel was most important, bdth from the company's point of view and also from a national aspect, as the exports were to some extent helping to cowipensate for the wretched prices received for .v^ool and wheat, and would form some part in maintaining Australia's credit balances abroad. The New Zealand market, which had been quite an important one, had been seriously curtailed by import regulations and lack of exchange. However, latest indications, pointed to an improvement, arid increased orders were coming from that direction. At Port Kembla the plant of the Australian Iron arid Steel Company was working at full capacity, both on local and export orders, Mr. Darling later proceded to deal individually with the operations of the subsidiary and associated companies, which include: —Ryeland Bros. (Aust.) Proprietary, Limited, B.H.P. By-products Proprietary, Limited, Stewarts and Lloyds (Aust.) Proprietary, Limited, Australian Wire Rope Works Proprietary, Limited, and Commonwealth Steel Company, Limited, Newcastle. The Commonwealth Rolling Mills Proprietary, Limited, Port Kembla, had commenced production of motor body and other high-grade sheets. TINPLATE MANUFACTURE. Since the last meeting a company known as British Tube Mills (Aust.) Proprietary, Limited, has been formed by Stewarts and Lloyds (Aust.) Proprietary, Limited, and Tube Investments, Limited, of England, for the manufacture of precision tubing from steel from the Newcastle works. The erection of the plant was well under way." ■■•..'■ ■-.■.. •■■■ ■■•: - ■ .■ A, proppsal for the manufacture of tinplate in Australia was placed before the Government, and had resulted in a public inquiry by the Tariff Board, whose finding had not yet, been announced. The industry would be of very great importance to the steel industry oi Australia.