MIRANUI, LTD., AND FLAX

NZ Truth, Issue 1127, 7 July 1927, Page 4

MIRANUI, LTD., AND FLAX

"FIAT LUX" REVIEWS PR0 'AND CONS

Financial Reviews

Prospectus of Latest Coy. In J? 'eld Of Hemp Enterpriser

fypRANUI, Limit- 1 ed, is being | p r o.m o'tc d , by | iMessrs. Hope Qib- | "bons, Alfred Seifert | and .-: Art hv r E. | Mabin to acquire! land carry on the 1 well-known . bust- | ness of A. and L. § Seifert Flaxdress- | Jng Co., Ltd., of | the Manawatu dis-^

itrict. ,--. . ■•- •- „, .■■ r The new company will have a nominal capital of/ £95,000 divided into £1 shares, and iri addition it is to have a debenture issue of £55,000 at 6% per cent, for ten years. Whether, these debentures are to be issued tax-free or not and whether they'' are to 'be secured by mortgage or are to be "naked" Is not stated. '■■• '<■ These omissions are, m this writer's opinion, very serious since assuming the debenture tax to be 4/6 m the £ and to be payable by the new company this would raise the cost of this money to approximately 8 per cent, per annum. ' . On the other hand, if the vendor company (A. and L. Sejfert, Ltd.)r* has to pay this- rate of tax, its re- : turn would be reduced to a modest 5 per cent. - Of the capital of £95,000, £50,000 worth of shares are to be issued as fully paid-up to 'the vendor company m "part payment ofe purchase money, whilst the balance of £45,000 is , how available for public subscription.' \ In this connection it is interesting to note that the whole amount has been ; underwritten by the recentlyr formed New Zealand 1 Underwriting and Development Corporation, Ltd., whiqh is to receive an inclusive fee of 6 pe*r cent, for both underwriting the issue and for brokerage. '..'■'. As it is stated that the, provisional directors and their friends applied for 20,000 of these shares piror to the issue of the prospectus, . the organising underwriters should be able to show a decent profit out of the £2700 fee which they will receive for placing the remaining 25,000 shares. Qome Costs .The. property to be acquired by the new company does not include the whole of. the land owned by the vendor company. .■■; A. arid L. Seifert, Ltd., own some 4393 acres, but- are selling only 3105 gicres to Miranui, Ltd., retaining the balance, which is stated to be purely pastoral land. v In -addition to the 3105 acres of land Miranui, Ltd., is to acquire, A. and L. Seifert's seven -stripper mill at Makerua, neap. Shannon, together with all plant as a- going concern. ' The price to be paid' for the- land, crops,' tramways and plant is £46 per acre—^qual to £142,868. In all probability this piece of very high-class land is reasonably cheap at the figure, but the prospective, investor has no means whatever of gauging this since no valuation : of any kind is- supplied relating to any part of the property. : . ,,tt v surely -is '; not fair. to. A; "■and L. skifert; Ltd.^,. Miranuj, Ltd., or' to prbbable . investors : 'that the prbriioters should leave. such a big question to be settled"" by each individual investor who may or may not be capable of properly- valuing the: assets to be acquired. "..■■■",■ The promoters could perhaps explain why the' proper, course of engaging several independent . expert valuators to certify . their opinions for publication m the prospectus has not beer followed m this instance. ;■-.'■.. Let-us turn now to the question o1 probable profits. .-.-'*■■; ' v Elaborate., estimates of costs of production -are given m the pros- ■;-■ pectus {: and this writer be! ieves such figures to be, as accurate as ; is reasonably possible. • But why should the investing public be served. up with estimates wher the prospectus states, \that : "The A arid ' L. Seifert Fiaxdressihg Co., Ltd. was founded m 1907:, . . ■-. Th< success of its operations is furthei evidenced by the fact that during thi riineteen years of its existence it hai consistently paid satisfactory, divi derids to its shareholders. ■<"Its flaxfield. at the present momen is one of the best, if not the best In th« Dbmihion. . / : " "The mill equipment is complete ani there Is.npthirig for Mlrariul. Limited to do but carry on the work of flax milllhg without any further capita expenditure ,or any intermission ii earning power." " ;: ! ' ; This writer believes the above state: menta to be meticulously accurate ii every detail, but cannot understanc why certified statements covering these matters have; been omitted frbn thei prospectus. . ;

iiiitMiiiMMniiiMiinnniiniiiiJiniiiiintiniititiiiiuiiHuiifiiiiiHiiiniiimiiinni l^ (By''Fiat Lux.") ■ | THAT there is - a' ■ good future | * for the Ddfjiinjon's flax jn- | dustry is the J considered toinion = of "Fiat Lux/; hut it would Jn- = deed boaidifficult matter to ar- | rive at '•■■'tKi's conclusion if one = had *to rely entirely upon the |. exceedingly poor prospectus is* |. sued by Miranui, Limited. , | liiiiiHiiiiiiiiiiiHiiiiiiiHiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiinimiiiiiiiiiiiiiiiiiiiiiiiiinT-

only prosperous, but is being rapidly developed." s Let us delve into ancient .history per medium of the New Zealand Department of Agriculture's .Bulletin No. 95 (new series) issued In June, 1922, and on page 62 is. to be found a table of