FATE OF THE R.M.S.P.

Greymouth Evening Star, 12 September 1931, Page 8

FATE OF THE R.M.S.P.

OFFERS FOR FLEETS?

LONDON, July 30The Royal Mail Steam Packet Company, as is well known, comprises a large number of fleets which are of three groups, a South American, a West African and a South African group. Conjecture is busy over their fate. It is understood that the R-M.S.P. Company is willing to consider offers, and what is looked for is offers for fleets or groups rather than individual ships. The White Star Line and the Shaw Savill and Albion Company, which are interlocked, do not now come under the control of the Royal Mail Steam Packet Company, and already steps are being taken for both lhes,e companies to lease Royal Mail House and carry on independently of the R.M.S.P. Company. Until the voting trustees, who are now conducting the affairs of the R-M.S.P. group, make their official decision known, this suggestion can only be regarded as unofficial. Comment in to-day’s “Fairplay,” a leading shipping journal, carries considerable weight“Unless they discover a satisfactory reply to it within the next few months, the trustees for the debenture holders will take the matter in hand, have a receiver appointed, and proceed to realise the assets. It is obvious that the White Star Line will disappear from the Royal Mail group, which, the whole of the ordinary capital having been lost, has no further financial interest in it (although curiously enough, the Oceanic Steam Navigation Company’s shares are not owned by the White Star Line, being held in trust by the Royal Mail Company for the International Mercantile Marine Company of New Jersey, which company still has £2,350,000 to receive of the purchase price). UNCERTAINTY OF FUTURE.

“If a receiver is appointed, the liability of the Royal Mail Company to the preference shareholders of the White Star Line in regard to the guarantee of principal and dividend will be of no value, and arrangements will nave to be made to pay tbe balance of the purchase price of the Oceanic shares, or the International Mercantile Marine Company may once more be the owners of this famous line, much to their regret, and they would make every effort to resell the shares. Of course, George Thompson and Company, and the steamers in the Australian trade purchased from the Commonwealth Government, f will follow the White Star Line. As to the other companies in the group, efforts were recently made to purchase, the Elder, Dempster Company, together with the 1 companies it manages, but ’no satisfactory terms could be arranged. The Lamport and Holt fleet is'no longer in the group, a receiver and manager

having been appointed, who, I understand, will issue his report, showing the position of the company and the value of the assets, so far as can be determined early next month- Again, with the appointment of a receiver, the Trade Facilities Act Committee would have ( to seize the vessels owned by the R.M.S.P. Meat Transports and dispose bf them to satisfy their loan of £2,550,569.

“It is thus obvious that the group, if anyone can be found to finance it, must inevitably be smaller than it was, say, two years ago. It is also clear that, if the assets were realised today, there would not- only be sufficient to meet the claims of the debentureholders, and the banks would accordingly stand to lose heavily, but also the whole of the shareholders’ capital would be lost, and the Government might have to make up a deficit in respect of the Trade Facilities loans, Moreover, should any financier come in to acquire the Royal Mail Company’s fleet and the principal assets, he would have to be prepared to meet losses until the trade of the world improved. If it is decided to sell, book values will be no guide to either the voting trustees or a receiver, and, as the number of likely purchasers Is very small, there will be practically no competition, and therefore very low prices’ will have to be accepted.

GREATEST SHIPPING COMBINE. “I understand that it has been decided to sell the assets of the Royal Mail group, and, in order to effect this, to regroup the lines. Apart from the White Star group, which includes the companies referred to above, there will be the South American group, consisting of the Royal Mail Company, the R.M.S.P. Meat Transports, the Pacific Steam Navigation Company, the Nelson Steam Navigation Company, and David Maclver and Company; the West African group, consisting of Elder, Dempster and Company, Limited, the African Steamship Company, the British and African Steam Navigation Company, the Elder Line and the Imperial Direct Line; the

South. African group, comprising the Union Castle Line, Bullard King, and probably James Moss and Company, McAndrews and Company, and J. and P. Hutchison; and the Coast Lines group. If a satisfactory price were offered to the voting trustees for any of these groups, business would, I understand, result. If this scheme is carried out and the groups are sold, it will put an end to the greatest shipping combine ever known. Of course, in most cases the ordinary shares of the companies will be sold, but where the liabilities of a company like the Royal Mail Company or the R.M.S.P. Meat Transports exceed the value of the assets, it is obvious that only the ! steamers would be disposed of, as no J pne would think of buying the shares * of the companies and thus taking over ' the liabilities.”