THE NORTH NEW ZEALAND WOOLLEN MANUFACTURING CO.

New Zealand Herald, Volume XXV, Issue 9166, 22 September 1888, Page 6

THE NORTH NEW ZEALAND WOOLLEN MANUFACTURING CO.

PROPOSAL TO WIND UP THE

COMPANY.

PRESSURE FROM THE BANK.

As extraordinary general meeting of the shareholders of "the above company was held yesterday afternoon at the large room in the New Zealand Insurance Buildings. There was a crowded attendance, a great number being unable to find sitting room. The object of the meeting was set out in the circular convening the meeting, namely, to consider, and if deemed expedient, pass a resolution for voluntarily winding-up the company. Mr. R. C. Bars tow presided. The Chairman said that although he was sorry for the occasion which called them together he was extremely glad that so many had responded to the circular convening the meeting, for it too often happened that when a company's affairs were not satisfactory the shareholders shirked their responsibility, and left, the onus on the directors, and it was therefore very cheering to himself and his fellow - directors to see so many here with them to consider present untoward circumstances. He could not do better than read to them the circular issued on the 11th of May last to each of the shareholders, in which they were congratulated on the prospects of the company, but pointing out that they had to consider the question of ways and means, that further capital was required, and they were appealed to to take up 10,000 preferential shares, which would enable the Company to meet its engagement's. That circular and appeal was issued in May, and had half the number of shares named been taken up, or even if 3500 had been taken up, they would have tided over the difficulty, "but how many did they think were taken? Only 1200, the half of which were taken by tho directors themselves, and what therefore were the directors to do? They had tried to interest the shareholders by offering a 10 per cent, privilege. They resolved not to allot the shares unless"3ooo were applied for, and they failed in getting that number taken up, and now the bank had put pressure on them. They begged the Bank of New South Wales to hold over, but they refused. What did the bank care for" the shareholders? They would get their money and leave the company in the lurch. The directors did not want any shareholder to lose his money, and the only way they could see out of the difficulty was to go into voluntary liquidation, and get from the shareholders and the public applications for shares in a new company, and buy the concern from the liquidator, but if they were not in a position to do this before next Monday week, the bank would stop in and take possession of everything. They had begged of the bank to hold over proceedings, but without avail. He (Mr. Barstow) saw a letter published stating that the directors were putting the company into liquidation, so that they might buy it themselves and exclude the small shareholders, but he might remind them that the directors themselves were the largest shareholders, and so satisfied were they of the soundness of the investment, that they were prepared to so in even more largely than before; but the shareholders must help them ; if not, every penny they put into the company would be lost, but if they could raise sufficient to buy the mill for a moderate amount, they would save what would otherwise be lost. If, however, they let the Bank take possession, the ownership would pass out of the colony, or the mill might be closed. He knew there was a movement in the South to remove it. Their position now was that they must either wind up themselves, or others would do it for them, and they should therefore make a strenuous effort to secure it themselves. It was an industry in which he had taken a pleasure and pride, and he had hoped to secure it for themselves and for their children. He moved, " That it has been proved to the satisfaction of this meeting that the company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same, and accordingly that the Company be wound up voluntarily." At the request of a shareholder, the letter from the manager of the Bank of New South Wales was read. It was a formal demand for the payment of £16413 8s sd, with interest, on or before Monday, Ist October, or in default the bank may exercise its rights to recover without further notice. Mr. Groom seconded the resolution pro forma. He regretted that the affairs of the company had got into this condition, and would like to hear from the chairman what was the lowest amount of capital required. The Chairman replied that to get rid of their indebtedness they wanted £15,000. They wanted double what they had received. They might perhaps think the directors were foolish for going on, but so many had broken their promises that they had actually only received £16.000 out of £•25,000 promised" so that £9000 never came into their hands.

Mr. Adamson asked how many had paid up? The Chairman said there were 600 shareholders, of whom 239 were more or less in arrears, but the amounts were so small that if they sued the law expenses would eat them up. There was only £1300 more to call. Mr. Adamson said he and his family had taken up shares in the company to help the sheep-farming industry, and he would be willing to pay three times more than he had done rather than see the company sold up. The Chairman said if the other shareholders met them in this way, there would be no difficulty. If they got in every penny it would only amount to £2000. His plan was to go into liquidation, and get everyone possible to take shares in a new company, and having got a sufficiently subscribed list, to go to one of the banks and ask them to give the money to pay for the mill.

Mr. Adams asked in what way the shareholders would benefit by that ? _ The Chairman said the mill had cost £30,000, and if they got it for half what it cost, they would get 20s for 10s. In any other way it would be a total loss, for the bank would take the lot.

Mr. Adamson said he was prepared to double his amount.

The Chairman said this was frequently done in gold mining companies, but this was not a gold mining company. It was a sound financial investment. All their hands were trained, their goods were amongst the best in the market, and they had orders now on hand which would keep them going for two months, and they had to refuse a large order from the South because they could not fulfil it. A shareholder asked whether he was to understand that the bank would not take the interest.

The Chairman* : No ; they v. the principal. I may state that 3360 dirties signed applications for shares \vh never paid a penny. . Mr. -J. G. Hutchison said he

man of a meeting held in Onehun. . he previous day in reference to this;, .-'. sal of the directors, and it was asked v. , her if the small shareholders were unable to take shares in the now company they must go to the wall ? It seemed to him that it was the new company that was to have all the advantage, and that did not appear fair to them.

The Chairman said the small .shareholders could take shares again. There were little fish in the sea as well as big ones. Mr. Hutchison said if they could devise some means to go on they would get some benefit.

The Chairman : Yes, if you find £16,000 to pay the bank. We have got no resource but to go into liquidation. Mr. Hutchison : Then pub it into the market and let it fetch as much as it will. (Cheers.) The Chairman said if it was put up to auction the shareholders would not get ft farthing. Mr. Hutchison said they would have the satisfaction of knowing that it was put up. The Chairman said that on Monday week the bank would take possession, and »he shareholders would lose everything, but If they took up shares, and bought in the mill, they would be recouped. Mr. Hutchison said the meeting over which he presided bad asked him to address this meeting, and ask to have a committee appointed to see whether they could not devise some scheme better than liquidation. Mr. John Batoer said the directors 9!ssq desirous of realising to the best ad-

vantage, and the liquidator was bound by law to do so. They were simply in this position, that they must wind up, and no one would suffer more than the large shareholders, for when the mill was sold, it would not realise more than the debts of the company, arid the question was, whether they should appoint their own liquidator instead of leaving it in hands not friendly to the shareholders. Mr Morton said the last balance-sheet showed a profit of £190, and what, he asked; had caused the present loss. Had there been bad debts ? The Chairman said not one, but as they might see by the case which had been before the Court, the judge stated that the books had been cooked. The accounts for the last audit had been cooked, so that instead of a profit of £180, as shown then, there was actually a large amount of loss. Then, again, at first their weavers were inexperienced, and tie stuff turned out was not <rood. There was a positive loss of £400 to £500, instead of a profit of £190. Air. Morton said this statement admitted incompetence on the part of the directors and auditors.

The Chairman said no; that accounts had been kept back. Mr. Burns said if the meeting was adjourned for a week, and opportunity given to the shareholders and the public to subscribe £10,000, then they could stay the bank, and get a mortgage for the balance, and tho preference shareholders would have the security of the plant, less the £5000 mortgage, but it should be distinctly understood that unless the money was subscribed within the week the property must go. He proposed, " That this meeting adjourn for a week, in order to give the shareholders and the public an opportunity to subscribe £10,000, preference stock to be issued at the rate of 5s on application and 5s per month after." The Chairman said that would put them in a corner. The meeting would be held on Friday afternoon, and the money must bo forthcoming on Monday or the bank would not stay its hands, so that there would bo only Saturday forenoon to get. it. Mr. ADAMSON'said he, as representing the Northern shareholders, would second the resolution.

Mr. Brookfield raised the question whether the bank would not sell under their mortgage even if the company went into liquidation. The Chairman said no, but if the bank took possession they would have a customer ready for it. A desultory conversation then took place amongst groups of shareholders. Mr. Groom asked if the directors had tried to mortgage the property outside the banks ?

The Chairman said yes, but they could only get £5000. Mr. Groom said if they could get £10,000, they might have the balance taken up today amongst the shareholders present. He asked what was the least number of preference shares required ? Mr. Caughey asked what were the prospects of the company paying if the preferential shares were taken up ? The Chairman said it would pay good dividends. They were now paying 9 per cent, to the Bank, and that in those times would be a very fair dividend. The reason the affair was not so prosperous at first was that the wholesale houses had sent their orders to the South and to England, and the company had to sell their wares as stock to force them on the market. But now the worth of their goods was recognised, and they came and ordered their goods beforehand. They had now only three pieces on hand and had orders for hundreds. He knew their present trade was a profitable one and would continue to be so.

Mr. Caughey said there was no doubt there was a very strong feeling of want of confidence in the management, and he instanced a case of tweed being sold for less than it could be produced. The Chairman said that their late secretary had without authority sold some tweeds at less than their value, but the directors did not know of it for months afterwards.

Mr. Bridgman said he was perfectly satisfied that if they carried on it would be a great success, and he for one would be willing to take up more shares. They should not let it out of their hands, and let other people get the benefit of their expenditure. In his opinion the directors had done all they could. Mr. Caughey asked whether the old shareholders would have a preference ? Mr. Batger said it was intended to hold over for them for twelve months, if necessary, a sufficent number of shares. Mr. James Dilworth suggested that they should postpone the meeting, not for a week, but until Wednesday next, and in the meantime the shareholders would have an opportunity of considering the case. Many of those present were only now placed in possession of the facts, and the actual position of the company, and they required consideration. He did not see that the adjournment would prejudice the progress of the company, ana 011 Wednesday they would be prepared to act, either by taking additional shares, or in some other direction. It was in the interest of the small shareholders he made this suggestion, and he hoped the directors would see their way to adopt it. He moved his suggestion as a resolution.

The Chairman* said he was quite willing that they should adjourn until Wednesday, but if they adjourned till Friday there would be no time to collect names and deposits, and go to the banks to make arrangements. If it was the wish of the meeting they would adjourn till Wednesday. Mr. Burns consented to withdraw his motion in favour of that proposed by Mr. Dilworth.

Before it was put to the meeting the secretary was asked to ascertain from the shareholders present who might be unable to attend the adjourned meeting what shares they would take. Names were given for 660 shares, not including those to be taken by the directors and other large shareholders.

The motion was then put and carried unanimously, and the meeting was adjourned until three o'clock on Wednesday next.