THE NEW ZEALAND LOAN AND MERCANTILE AGENCY CO.

New Zealand Herald, Volume XXV, Issue 9139, 22 August 1888, Page 3

THE NEW ZEALAND LOAN AND MERCANTILE AGENCY CO.

An extraordinary general meeting of shareholders of the New Zealand Loan and Mercantile Agency Company was held at the Cannon-street Hotel, London, on July 6, the Right Hon. A. J. Mundella, M.P., in the chair.

The Chairman said : This meeting is the necessary sequence of the meeting held on the 13th of April, the minutes of which we have just confirmed. You then authorised us to issue 20,000 fully paid-up shares. Our reasons for the issue were fully set forth at that time, and the report of that meeting has been circulated amongst our shareholders. I have now the pleasure of informing you that these shares have all been issued, and have added considerably to the strength of our proprietary and to the number of our shareholders. They were taken up in part by the old shareholders, and in • part by the debenture holders, and the remainder by upwards of 300 new shareholders. This brings up our proprietory to between 1300 and 1400 shareholders, and I do not believe any institution in the City of London, in proportion to its capital, has a better proprietory than we now have. The whole amount being taken up we regard it as our first duty to profit by the present position of the company, in the manner foreshadowed when we submitted to you our proposal to make this issue. We have now a subscribed capital of £4,000,000, and a capital paid-up on the old shares of about £304,000. When the sixth issue of shares is fully paid-up, as it will be in the course of the present year, there will be a further addition of £500,000, which, with a reserve fund of £270,000, will show an aggregate working capital of £1,134,000", a position very different to that which the company occupied a few years ago. We propose to go on strengthening this position, and we hope in time to effect a gradual but considerable saving in the interest paid on our debentures. You know that up to now our debenture issues have been chiefly terminable, with a small amount in perpetual bonds. The former extend over a period ranging from five to ten years, so we can only deal with them as to payment from time to time as they mature. We hope to anticipate the maturity of some of those that are current by offering to exchange debenture stock as well as perpetual debentures for terminable obligations. The advantage of debenture stock is that we shall issue it at reduced rates; it will remove the'uncertainty attaching to terminable debentures ; it is more negotiable, and affords facilities to trustees and others of investing odd amounts which cannot be so treated by the issue of debentures. The adoption to-day of the resolution which has been read will give your directors the requisite authority for the purpose. I may embrace this opportunity of mentioning with regard to the Company's Articles of Association generally, that, as these were originally drawn up nearly twenty-five years ago, in view of subsequent .legal decisions in connection with joint stock companies, they are now to a certain extent antiquated. They were prepared for a small company with a capital of half a million, having only £50,000 paid up, a company that was to confine its operations entirely to the colony of New Zealand. Since that time many changes have taken place, necessitating considerable amendments and extensions in the articles. During the interval the paid-up capital lias increased from £50,000 to a sum which, as I have already shown, will, inclusive of reserve, shortly amount to £1,134,000, and instead of our being confined to the single colony of New Zealand, some three millions of our capital are employed in Australia. It becomes, therefore, necessary that we should consolidate and • recast our articles. We accordingly hope, without giving you any unnecessary trouble, at? our next annual meeting to submit to you these Articles in a much simpler form, consolidated - and modified by the experience of the past. In connection with this subject, there is another matter which it may be well to mention, that on the consolidation of our Articles care will be taken to afford to the Board in London increased power of control and supervision of our colonial operations. The Articles as they now stand provide that the colonial directors shall exercise in the colonies powers equal to those vested in the directors in London. Seeing, however, that the large preponderance of our shareholders is in this country, and that the Company's resources, in the shape of capital ana debentures, are mainly derived from English investors, we propose that the London Board, with its increased responsibility, should have increased power of control and supervision. Care will be at the same time taken to provide for ! the appointment of Boards of Advice in Australia should it be found advisable to do | so. Gentlemen, I do not know that there is anything further requiring explanation, but I may briefly sum up by giving a resume of what I have stated —that our object to-day is to take power to issue debenture stock, which is more convenient and negotiable; to substitute gradually permanent debentures and debenture stock for our present terminable debentures ; to obtain these at a lower rate of interest so that we may compete with the reduced rates which I am bound to say now prevail in the colonies, and thereby to give increased strength and security to the operations of the company. Gentlemen, the resolution I have to propose has been read to you, and I now beg to move its adoption as follows : — " That the Articles of Association be altered by cancelling clause (5) of regulation 79, and by inserting the following regulation, to be distinguished as regulation 79b, immediately after regulation 79a, viz. : —The directors may from time to time, at their discretion, borrow or raise money for the purposes of the Company in such manner and upon such terms and conditions in all respects as they think expedient, and in particular by the issue of debentures and debenture stock, or either, or upon mortgage or bond, provided that the principal moneys at any one time owing in respect of moneys so borrowed or raised, shall not exceed the amount for the time being of the unpaid capital of the Company, but this proviso shall not apply to any guarantees given by the Company of mortgages or securities granted by any other persons, nor to moneys from time to time raised or.borrowed by the sale or negotiation of bills of exchange or promissory notes, nor to ad.vances made by bankers or others, nor to any transaction not being a loan or advance to the Company on debentures, debenture stock, mortgage, or loan entered into for the purposes of the mercantile business or agency of the company. And without prejudice to the generality of the foregoing power, it is expressly declared that any such debentures or debenture stock, and the principal moneys secured or represented thereby, may be made payable at a fixed time or in any such specified events, whether contingent or otherwise, as may be determined or may be in the nature of a perpetual loan, and may be made payable to bearer or to registered holder or otherwise, ! and may be made transferable free from equities, and may be charged or secured by trust deed or otherwise on the undertaking, | property, and rights, present and future, of the company, or any part thereof, including, if thought fit, the unpaid capital for the time being, and any such trust deed may be in such terms and contain such provisions as the directors may think expedient, and in the case of a trust deed for securing debenture stock may include debentures as part of the security, and any debentures, debenture stock, bonds or other securities, may be issued at a discount, premium, or otherwise, and with any special privileges or conditions as to redemption, surrender, drawings, conversion or exchange into, or for shares, or other securities, or otherwise as may seem expedient." Mr. James Farmer seconded the resolution.

Before putting the resolution, the Chairman explained in reply to inquiries from shareholders, that sub-section 5 of clause 79 of the existing Articles would be cancelled, and in lieu thereof the resolution would form Regulation 79b of the Articles of Association. This change would in no degree increase the indebtedness of the company beyond the amount of its unpaid capital. The resolution was then put and carried unanimously. „

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