TYRE FACTORY

Otago Daily Times, Issue 25964, 3 October 1945, Page 4

TYRE FACTORY

REID RUBBER MILLS CAPITAL INCREASED TO £1,000,000 (Special) AUCKLAND, Oct. 2. A resolution that the capital of Reid (New Zealand) Rubber Mills, Ltd., be increased from £250,000 to £1,000,000 by the creation of 750,000 shares of £1 each was unanimously adopted at an extraordinary general meeting of shareholders to-day. This step has been taken consequent upon the company being granted a licence for the manufacture of motor tyres and tubes, and the new capital figure has been set at £1,000,000 to cover not only the requirements for the construction and equipment of a tyre factory at Ellerslie, with its attendant expenditure for additional stocks, but also to provide a reserve of unissued capital in view of probable further expansion.

The chairman of directors, Mr A. M. Seaman, referring to the licence issued, said that under the arrangements made with the B. F. Goodrich Company they would be supplied with all the latest technical information. That service would be paid for, but the cost would be less than if the company attempted its own research work. The Goodrich Company would take up 100,000 shares, and provision would later be made to give it the right to appoint one director. That company’s agents in New Zealand, Messrs E. W. Pidgeon and Co., Ltd., had undertaken to subscribe for 20,000 shares in the general issue to be made later, and in the meantime they had bought a substantial number of shares on the open market. Mr G. C. W. Reid had left for America to confer with Goodrich Company experts on factory design and lay-out and the selection of factory plant. Mr Seaman continued. It was proposed to buy most of the plant in Britain. Until the plant was ordered the cost could not be stated definitely, but it was considered that the expenditure would be from £400,000 to £540.000. It was proposed to offer 100,000 shares to the existing shareholders in proportion of one for each two held. It was expected that at least 12 months would elapse before the shares were offered. The company’s solicitor, Mr H. M. Rogerson, said the Goodrich Company and Messrs Pidgeon and Co. would come in on exactly the same terms as any outsider. “If the shares are issued at a premium, no matter how high it is, they will have to pay,” he added. Referring to Messrs Pidgeon and Co., Mr Rogerson said that Reid Rubber, Ltd., would have its hands full with its new project without undertaking distribution. Messrs Pidgeon and Co., which was wholly owned by New Zealand shareholders and was selling for the Goodrich Company, had been given the sole selling right of one brand of tyre. That left Reid Rubber free to distribute the other tyres as it thought fit.