THE NEW ZEALAND LOAN AND MERCANTILE AGENCY.

New Zealand Herald, Volume XXXI, Issue 9400, 5 January 1894, Page 6

THE NEW ZEALAND LOAN AND MERCANTILE AGENCY.

I [FROM OUR OWN CORRESPONDENT.] London, December 2. , Great interest continues to be taken in the progress of the re-constructive scheme in connection with the New Zealand Loan and ! Mercantile Agency Company. The scheme 1 is notyeb made public, but lam assured on 1 what should be good authority, that only a few legal and technical details remain to be ' settled, and that the scheme will, in all 1 probability, be submitted to the shareholders on the 15th instant. Ib is deemed probable that one outcome of the re-con- ' struction will be some considerable changes 1 in the directorate of the Company, bub in 1 what direction I am nob ab presenb in a ' position to say. [ The i last remaining difficulty of any magnitude, that in relation to the security 1 held by the Bank of New Zealand, has been 1 settled on a basis satisfactory to both aides. 1 The terms of settlement greatly improve 1 the position of the company, while they 1 leave the Bank's security unimpaired in : value, if indeed it bo nob improved through 1 the enhanced facility of realisation which results from the arrangement. Ib is admitted that the Bank of New Zealand has done everything possible toward facilitating the reconstruction of the company consistent with the retention of the ample security the Bank holds for its own advances to the company. •'. Another phase of the legal proceedings • initiated by Baron Schroeder against the !,:« company appeared in the Law Courts last , Wednesday. The i case came ; before Mr. [~ Justice vaughan Williams, upon an , adjourned summons by the Bank of New i Zealand, claiming delivery from the re- ' ceiver for the debenture holders of certain > bills of lading, or the value thereof. Mr. i Buckley, Q.C., for the applicants, asked that the matter might stand over pending I completion of a re-construction scheme, I which provided for his clients. Mr. Ingle • Joyce, for the plaintiffs, concurred. Mr. - H. Macaskie opposed on behalf of Colonel i <"'lendow, stating that though his client, as ) defendant, represented all holders of deben- : bures other than those represented by the i plaintiffs in accordance with Mr. Justice • Kennedy's order, he had received no infor- > mabion whatever of a re-construction ? scheme. His Lordship granted an adjournl ment, with power for Mr. Macaskie's client ; to have the summons specially restored if > any delay occurred. I The basis of the re-construction scheme as it now stands for consideration is as follows :—lt is proposed to fund the whole of the company's liabilities amounting to about four and a-baif millions under three , separate heads, "A,""B,"and "C,"and to issue debentures under each head. The A debentures which will comprise the ' £1,300.000 secured stock held by Baron ' Schroeder and others, and half a-million in i addition, making a total of £1,800,000 are , to be secured by a first mortgage on all the assets and will bear interesb at four per | cent, The unsecured debenture holders and others will receive half their claims in , Bdebentures, which carry asecond mortgage over the assets and bear interest at five per cenb., and half in C debentures which will > nob be secured, but will depend upon the profits of the business, and will also bear J, interesb at five per cenb. Ib is further pro- } posed to make a call of £5 10s per share , spread over bwo years, so as bo " leb down " . the shareholders as easily as possible. Such are the outlines as furnished to mo , of the scheme in its present shape. It is . estimated thab the interest on the whole funded liabilities will come to £160,000 per annum, but the profits on the company's business are stated to be £280,000 yearly so there should be an ample margin. The call should realise about £750,000, > but, allowing for some defaults, it is believed ib will bring in at any rate more than ' £500,000. It is required, of course, for I the purpose of providing capital with which to carry on. The company has also cash to ' the amount of some £290,000, so with over ' half a million from the call, ib should be 1 in a very good and strong position. I hear j exceedingly favourable opinions now expressed in the city as to the future prospects » of the company, and I hope that, before 3 this reaches you, its re-construction and rer habilitation will have become an accom--3 plished fact. 1 Thab there will be a good deal of discus--1 sion at the shareholders' meeting is, of J course, most probable, bub this will serve r as a safety-valve for the release of highr pressure steam, after which the machinery ' may be expected to work much more smoothly and satisfactorily.