ACQUIRING DEBENTURES

New Zealand Herald, Volume LXIX, Issue 21293, 21 September 1932, Page 11

ACQUIRING DEBENTURES

TRANSPORT BOARD'S MOVE

LEGISLATION TO BE SOUGHT POSSIBLE EFFECT ON FINANCE Legislation is to be sought by tho Transport Board for authority to acquire, either by purchase or otherwise, debentures issued by other local bodies for tramway purposes, the board having decided yesterday to take steps to obtain this power. The board is at present unable to acquire such debentures. Of the board's total indebtedness, which was shown in a return furnished nt a meeting on June 14, at £2.144,500, a total of £1,853,000 represents sums borrowed during the period the City Council controlled tho tramway undertaking. Ibis amount comprises 11 loans, maturing between July 1, 1040, and December 1, 1960. The chief portion consists of a loan of £1.246,400, which falls duo on July 1, 1940. In addition, there is a further sum of £3600 duo on January 1, 1943, making a total of £1,250,000. On this total interest amounts to £64,670, and sinking fund payments at the rate of 24 per cent to £31,250, giving a total annual charge of £95,920. Other - loans raised by the City Council were £125,000, £70,000, £280,000, £100,030 and £28,000. On these the sink-ing-furi'l rates vary from 1 per cent to 2 per while interest varies from 51 to per cent. The purchase of blocks of debentures issued under any of these loans either from revenue or by means of a further loan raised on more favourable terms would result in a saving to the board in interest and sinking fund payments on the City Council issues.

Since assuming control of the undertaking, the board has issued debentures totalling £291,000 under the transport development loan of £586,000, and at its last meeting converted £IIO,OOO of this loan to a table-mortgage basis. In addition it authorised the raising of £130,000 under the transport development loan and £50,000 of the Avondale extension loan of £58,000 on the same basis.

After the meeting of the board, the chairman,, Mr. J. A. C. A Hum, stated that lie could not disclose the plans of the board in regard to the legislation required, or what action it was proposed to take if the desired authority wero obtained.