LOAN TO BE RAISED

Manawatu Standard, Volume L, Issue 194, 15 July 1930, Page 4

LOAN TO BE RAISED

POWER BOARD’S DECISION. FINANCE FOR EXTENSIONS. The Manawatu-Oroua Power Board decided at its monthly meeting yesterday afternoon to take steps to raise a further loan to enable it to extend its activities.

“The question, of the money market is going to be rather awkward at the present juncture,” stated the chairman (Mr J. A. Nash). “I have been making inquiries, and apparently through one institution we may be able to arrange the matter. I noticed that the Bank of New Zealand had arranged a loan of £IOO,OOO for the Auckland Transport Board at £5 10s 3d, but on interviewing Sir Henry Bucklpton, I found that it was quite a different proposition, the loan having been floated in London. We can obtain £50,000 and the proposal at present is to raise not more than 000, which is all that is required. We are becoming short of money and several works have been held up in consequence.” On the motion of the chairman, seconded by. Mr M. A. Eliott, the following resolution was carried;—“That the Manawatu-Oroua Electric Power Board make application to the Local Government Loans Board for permission to raise a supplementary loan of £50,000 (being 10 per cent of the original loan of £500,000) under Section. 19 of the Local Bodies’ Loans Act, 1926, for a term of 20 years, at a rate of interest not exceeding 6 per cent and an annual sinking fund to repay the loan at maturity, for the purpose of additions to the board’s main reticulation.”

“The Loans Board suggested that we should make application for the whole amount,” said the chairman. “We may be able to do without it, but in my opinion it will be wanted. Applications arc coming in all the time. Some are guaranteed, some are payable and others are not,”

Mr Perrett: What rate are you goto get the money at —5J per cent ? The chairman: I hope so, Mr Perrett. Mr K. W. Eglinton (the secretary) stated that the sinking fund would be £2 14s per cent, extra. Tlje larger the sinking fund, he said, the less the provision for depreciation. Mr Eliott: I see that the main thing to provide for is the extension of payable lines. So long as we continue that policy we should be on safe lines. Mr P. G. Guy asked for a return of the capital cost of the construction of the Palmerston North-Bunnythorpe line. • The chairman intimated that this would bo provided. Mr Eliott commented that, with the sinking fund provision, payments on the loan at 53 per cent, interest would amount to £8 9s per cent. Mr Nash observed that the last loan was well arranged in 1922. Apparently all the available money at present was wanted in Australia.