GAS COMPANY

New Zealand Times, Volume XXXIII, Issue 7870, 4 August 1911, Page 2

GAS COMPANY

INCREASE OF CAPITAL. BUSINESS EXPANSION. An extraordinary general meeting of the shareholders of the "Wellington Gas Company was held at the Chamber of Commerce yesterday, Air D. J. Nathan, chairman of directors, presiding. The following resolutions were submitted to tho meeting;

’That the capital of the company be increased to the amount of £550,000 by the creation of 150,000 new shares of £T each, to ho issued as preference shares, and that the rights, privileges, and conditions following he attached to such preference shares. 'That the said preference shares shall confer on the holders thereof the right to receive out of the profits of the company available for dividend a fixed cumulative preferential dividend at the rate of 5 per cent, per annum on tho capital for the time being paid up thereon respectively, but to no further share in the profits of the company, and such dividend shall ho paid as nearly as may he half-yearly, on the lotli day of June and tho loth day of December in each year.

• In the event of the winding-up of the company the holders of the said preference shares shall be entitled, in priority to the ordinary shares, to have tho surplus assets of the company remaining after paying the debentures, debts, and. liabilities_ of the company and the cost of winding-up applied, in the first place, in repaying to them the amount paid up on the preference shares held by then) respectively, but shall not be entitled to any further participation"in such surplus assets. The said preference shares shall only confer on the holders thereof the right to attend and vote at general meetings of tho company upon some or one of the question's following, that is to say: As to the reduction of capital; as to the winding-up of the company; .where the proposition to ho submitted to the meeting directly affects any of tho rights or privileges attached to such preference shares. That an issue he made at such time as the directors, in their discretion, may decide of 75,000 of such new preference shares out of the whole number of 150,000 iireference shares authorised by tffis resolution, and that the holders of existing shares be entitled in the first place on making duo application therefor to take. up, at jiar, throe shares for each £lO share wholly or partly paid up and held hy them respectively this day in the company. That, the directors bo authorised to sell any of the unallotted preference shares remaining out of such 75,000 shares, at par, to the employees_ of the company, and after such applications are satisfied to allot any unissued balance of the said first issue of 75,000 shares to any shareholders who may tender therefor at or above par, or the directors may otherwise dispose of same. ' THE COMPANY’S POSITION. , Ip a circular letter issued to shareholders it was stated that on June 15th, 1912, debentures fell duo for repayment in London to tho extent of £50,000. This is tho only debenture debt owing by the company. Tho make of gas for 1910 was -308,042,000 cubic feat, which showed an increase of over 18 per cent, in three years, 1907-10, and, as tho present works were now employed to their full capacity, the board had placed orders for plant, and was actively proceeding with the installation of the first section of the new works. These works would have a productive capacity of three-quarters of a 'million-' cubic feet of gas per diem as compared with the maximum output of the existing works of about one-aud-an-eighth million cubic feet of gas per diem, and Were estimated to cost £7s,ooo,'which sum would be required within the next twelve months, in addition to the £50,000 to repay the debentures. The directors deemed it inadvisable t 8 renew or increase tho debenture issue, ns security would have to bo given over the landed estate of the company; any such security would cause grave difficulties when the time came for dealing with the Wellington property. Whilst it is proposed to take power to issue 130,000 5 per cent, preferential shares of £1 each, it is intended to issue only 75,000 at the; present time, and to arrange to receive payment therefor at the option of shareholders, either in one or more sums bearing interest from date of payment, or by calls of 2? Gd per share, paid in months alternative with the calls on the existing shares. The directors propose to continue making bi-monthly calls of 5s per share on the old issue of shares, and of 10s per share, with 5s per share premium, ou the last issue of shares, thereby causing both issues to become fully paid in March, 1913. These calls, with the amounts standing at present to tho credit of tho company and available for new works, will produce over £50,000, which sura, together with £75,000 now proposed to bo obtained from preference shaves, will find the funds necessary to pay off tho debentures and to complete the present unit of the new works. As thoro are shareholders resident in England, the allocution -of tho surplus shares must be deferred until sufficient time has elapsed to enable tenders to bo received from such shareholders. It is, therefore, proposed to give to shareholders resident in New Zealand one month, and to those resident outside New Zealand four months, ip winch to make application for shares- There would also ba given to shareholders the right to transfer tho now shares on allotment to their nominees without charge for transfer or scrip. CHAIRMAN'S ADDRESS.

The chairman, in moving the adoption of the resolutions, said they had all, ho trusted, received by post cheques for the half-year ended June last, and. had concluded thereby, and rightly so, that the operations of the past half-yeay had been ns successful as usual. He was glad to have tho opportunity of now meeting them to confirm this, and to assure them that the results compared favourably with the corresponding period of 1910. The "trade showed the same steady increase of about 6 per cent, per annum that it had shown for some years back, thus confirming, as the result of the past half-year, the figures stated in the circular letter of Juno 28th as the growth of the previous three years. The financial result of the half-year’s operations having been satisfactory, there was, therefore, little for him to add to the statements ,set forth in tho circular, except to say that the proposals of the board had met with tho support of a largo number of shareholders who were not able to he jnesent that day. The board believed that the proposed issue of 5 per cent, preference shares was a class of investment that would find favour with tho numerous investors who had hitherto largely relied for investment of small sums on mortgages.

The proposed preference shares would, however, have the great advantage that, as the company paid the income tax thereon, the income derived was a net one and there was not any deduction for taxation. lU2BOLUTIOXS AGREED TO. Mr Gerald Fitzgerald, in seconding the resolutions, said the directors were to bo congratulated upon the proposals they had made. It was obviously in the interests of the company that the money should be raised amongst the shareholders rather than by debentures amongst strangers. This was particularly so in the case of the Gas Company, where the capital had been continually expanding, and would be expanding in the future. Thus it would be very unfortunate to be hampered by debentures. The chairman explained that this question had been considered by the hoard for some months, and the resolutions put before the shareholders had been unanimously approved by the directors. There had been no division of opinion at all. The resolutions were agreed to unanimously by the shareholders.