£50,000 SALE

Otago Daily Times, Issue 25862, 5 June 1945, Page 4

£50,000 SALE

FREEZING WORKS DEAL

GISBORNE COMPANY’S LOSS

The statement that the Gisborne Sheepfarmers’ Frozen Meat and Mercantile Cojnpany, Ltd., received £50,000 from the recent sale of the Tokomaru Bay freezing works to Messrs Thomas Borthwick and Sons, Ltd., was made by the chairman of directors, Mr H. B. Williams, at an extraordinary meeting of shareholders. The chairman stated that the Tokomaru works for some years had been running at a loss, which, from the 1936-37 season to last season totalled £31,000. The loss on last season’s operations amounted to £5600. Faced with the alternatives of closing the works or selling, the directors accepted Borthwick’s offer of £50,000, which resulted in a loss of £60,903, representing the difference between the book value and the price received. The directors proposed to repay a portion of £25,792 advanced by the mercantile department of the company to the freezing department, and this was taken into account with a proposed reduction of capital. By reducing the value of the 288,746 ordinary freezing snares from 10s to 5s each, the £60,903 loss on the works and the repayment of £11,283 to the ’mercantile department would be disposed of. In addition the directors proposed to cancel the 228,746 unissued ordinary freezing shares of 10s each and to reduce the nominal value of the balance of the unissued shares (53,762) to 5s each. This balance of unissued shares was calculated to meet all the requirements of the freezing department. The company would save £2500 in interest through the reduction of the bank overdraft by the £64,000 received, representing £50,000 for the works and stores and £14,000 from shareholders. “After this season it is hoped you will receive a regular dividend on the 5s ordinary freezing share capital, and this should increase the actual value of the shares, whereas the value of all 10s ordinary freezing shares transferred during the past three years has been Is only,” Mr Williams added. A motion for the reduction of the company's capital from £600,000 to £400,000 was unanimously approved.