DETAILS SCARCE

NZ Truth, Issue 1263, 13 February 1930, Page 19

DETAILS SCARCE

Speedwell Oil Coy (Ltd.) And Its Prospects

LARGE SHARE ISSUE (By /Fiat Lux.")

In an elaborately-printed prospectus of some 34 pages, the public is invited to subscribe for 26,500 shares m the Speedwell Oil Company (N.Z.), Ltd., the objects of which are described as (inter alia) the acquiring arid exercising an option held by the vendor for the purchase of the undertaking and assets as a going concern as from 20/7/29 of the Speedwell Oil Co. (N.Z.), Ltd., a company duly incorporated and carrying on operations at Newmarket, Auckland.

""THESE operations, it is claimed, have 1 been mainly directed to developing: a. marketable commodity which has proved highly successful. A further object is to sell the products of the British Oil and Turpentine Corporation, Ltd., "experts m scientific lubrication." The prospectus states that the Speedwell Oil Co. (N.Z.), Ltd., has been m operation over three years., but no details are given as to trading and profit, and loss figures during that period. The only information is contained m the 1 following rather vaguely worded certificate from a public accountant: — "I have examined the books and balance-sheet of this company and find that the company is m being and doing business, and is firmly established; that its turnover .is too, large for its capital, taking into consideration the original cost of establishingthe business; that it is now making a profit which should be increased were further capital obtained; that business comes to it practically unsought; that amongst its customers are many outstanding firms which have purchased Speedwell oil for the past three years; that it is a division of the British Oil and Turpentine Corporation m perpetuity." .The estimated profits of the new company are based upon the assumption that it will secure at least onefifteenth of the total oil importations into New Zealand (approximately 3,000,000 gallons), namely, 200,000 gallons on which" the profit "based on profits of the present company," would be £17,600. Expenses are estimated at * £9250, leaving an estimated net . profit of £5250, after providing for '.■= a reserve of 10 per cent. "Esti-H'A mated net profit on capital of.';": 5 £30,000, without reference to;£ 'Crimsangere' or greases is 17^2 per cent." No' 1 mention is made of , ; . income-tax on these profits. No definite- information is given as to how the new capital is to be allocated and exactly what assets are being acquired. -The r business :is apparently being acquired by the promoter for £2057/10/- o£, which £1000 is to be satisfied by allotment to the British Oil and Turpentine Corporation, Ltd., of 1000 fully paid shares and balance is to be paid m cash. '

The new company guai'antees to give the British Corporation a return of at least £50 per annum upon its 1000 shares. The promoter is apparently selling his option to the company for £3500, payable £1000 m cash and 2500 m fully paid shares.' Provision is made for a payment of 7%. per cent, for brokerage and underwriting commission on shares allotted (exclusive of vendor's shares) plus "a further sum of 2% per cent, on the nominal value of such shares" to covey travelling and other expenses. The preliminary expenses, apart from brokerage and underwriting commission, are estimated at £1000. The minimum subscription is 6000 shares, which are stated to be underwritten. A large proportion of the prospectus is taken up by testimonials from satisfied users of "Speedwell" oils and statistics and information regarding the local market. The statement is made that "probably m no business handling an essential commodity is the total volume confined to so few firms." This^may be so, but it must not be overlooked that the companies engaged m this trade are for the most part very powerful organisations with, immense resources. The new company is stated to be an associate of the British Oil and Turpetine Corporation, Ltd., but the prospectus gives very little indication as to the terms of the arrangement between the two concerns. The directors of the company are:— H. S. Burleigh (managing director, Wilton Furnace and Coal Co., Ltd.), Auckland; H. C. McElwain, company manager, Auckland; M. M/.-Millikinn, M.1.5.E., M.N.Z.S.C.L, ..consulting^ engineer, Auckland; G. F. ■Parkesj:?.chart"ered secretary, -,'F;C.t i S.i -^IJohVion), E.A.1.5., 'Auckland; :; Charie|?sAdains, managing director, - HauraW'^lilines, Ltd., Auckland; '„ The Sritish .Oil^and Turpentine Corporation, Ltd. (representative to be appointed). . %v Mr. H. C. McElwain, who is the'vendor to the company, will be managing director. There is a good field for the company's operations m the Dominion and it is marketing an article that has api parently a fair degree of popularity, but the prospectus is too vague m many essentials to sum up the possibilities of the shares as an invest- ' ment.