COBB SCHEME

Nelson Evening Mail, Volume LXXIII, 29 June 1939, Page 8

COBB SCHEME

NEGOTIATIONS WITH SWEDISH FIRM WITH APPROVAL OF GOVERNMENT BUT THERE MUST BE NO UNDUE DELAY At the extraordinary meeting of shareholders in the Hume (Cobb River) Electric Power Company, held at Christchurch on 20th inst., the following resolutions were carried unanimously:—

"That having considered the report of the directors on the present situation of the company and in particular (1) respecting its difficulty in obtaining finance, (2) respecting the discussions with the Rt. Hon. the Prime Minister and the Hon. the Minister of Finance respecting the Government taking over the whole undertaking, and (3) regarding the negotiations with the A.S.E.A. organisation, it was resolved—(a) That the Directors be authorised to negotiate with the Government with a view to the Government taking over the Companys’ enterprise in terms of the intimation conveyed to the Chairman of Directors of the Company by the Hon. the Minister of Finance. (b) That provided satisfactory arrangements can be made by the directors to enable negotiations to be carried on with the A.S.E.A. Company for that Company to invest in the capital of this Company the carrying on of such negotiations by the directors is hereby authorised.” These resolutions were the outcome of a comprehensive report submitted to the meeting by Mr H. H. Sterling, chairman of directors of the company. He fully outlined the work that had been completed to date at a cost of £237,000, the engineering difficulties that had to be overcome and finally the company's difficulties regarding finance and the eforts the directors had taken to obtain same. At a meeting of directors held on 24th May, it had been decided that meetings of shareholders and deben-ture-holders should be convened for the purpose of passing resolutions requesting the Government to purchase the assets of the company on terms as discussed with the Hon. the Minister oi Finance, Mr Nash

Since that meeting the New Zealand representative of the well-known Swedish firm A.S.E.A. Ltd., has shown considerable interest in the Cobb River enterprise and, as a result, has asked for a period of six weeks in which to submit a proposition to Sweden, whereby A.S.E.A. Ltd., will invest in the company’s shares and debentures sufficient capital to complete the works.

As informal conversations had taken place With the Ministers concerned regarding the Government taking over, the chairman was asked to ascertain how Cabinet viewed negotiations with the Swedish Company. The directors are pleased to report that they have a letter under the hand of the Prime Minister, the Rt. Hon. M. J. Savage, stating that the Government has no objection to the period of six weeks being allowed to negotiate with A.S.E.A Ltd., and that such allowance will not prejudice the position of the company regarding taking over the works by the Government, should such ; ultimately become necessary. This decision was given by the Prime Minister on the understanding that the tunnel work, which is still proceeding, shall be kept going during the period. The directors have arranged to this end. Mr Savage concludes by saying:—

"The Government does not wish the matter to be unduly protracted and so desires that every effort should be made to bring the matter of the future of the company’s enterprise to finality at the earliest possible date.”

The negotiations with A.S.E.A., Ltd., will be speeded up as much as possible, and to that end the debenture-holders at a meeting held on 20th instant asked the New Zealand Insurance Company, in conjunction with Mr C. W. Salmon of Messrs Cory-Wright and Salmon, Ltd., and Mr 11. E. Philpott of Alliance Electrical Company, Ltd., (both substantial share and debentureholders and residents of Wellington) to co-operatc with the company’s directors in dealings with either the Government or A.S.E.A., Ltd.