SOUTHLAND FROZEN MEAT COMPANY.

Otago Witness, Issue 2157, 27 June 1895, Page 8

SOUTHLAND FROZEN MEAT COMPANY.

(Fbom Oub Own Oobbespondhrt.) InVJBRCABGILL, June 23. A Hrgely-attended special meeting of shareholders of the Soufcbhnd Frozen Meat Company was held here yesterday considering (he followcircular giving an explanation regarding the company's pofcit r on •. — Ib will be remembered that at the annual meeting of shareholders on 9th February kit a pi'iipasal was made by the shipping companies to guarantee £10,000 of the debb dua to tte bank by the company, on condition that the control of the management was placed in their hand*, they agreeing to carry on the operations of the oompany for 12 months if not sooner relieved of their guarantee by the shareholders. This proposal was sobj icb to confirmation by the London board of the shipping companies. A resolution giving effect to the above was passed at that meeting, which, however, the London board of the shipping companies declined to accept. As it was supposed that they had not' sufficient data before them, and ia order to enable their colonial representatives to c.r/e^poud with them, a tempo.a-y arrangement to last till the lOch April was ma da between the bank and the directora of the Frozen Meat Company. Under this arrangement the shipping companies gave no guarantee, but provided funds to carry on the works. When th.6 10th April arrived, the London board cabled asking for* another month (till 10th May) to reply to the negotiations re b^nk guarantee. The bank decline! to wait any longer, and on the 22nd April gave the company three months' eolcc to pay up the overdraft, amounting to about £22,000. This, notice will expire on 22 ud July. At this point the directors of the Frozen Meat Company were in a dilemma— the bank demanded payment, while the shipping companies pt s'poned their reply till 10 h May. The dlrectois decided to wiit till lOoh May, in the hopo that the shipping compaom' reply would be favourable, but this hope proved futile and no offer whatever has been received from the shipping companies to meet the fiaancial difficulties of tha company. A scheme for reconstiuc'ing the company on a basis suggested by Mr G. W. Nichol was then submitled to the shipping companies, but so far they have refused to entertain it. (These propojals for reconstructing the company will be found appended to the circular.) A suit lo recover damages (ni-sasseJ at £30,000) from Messrs Neteon Bros, has been commenced, the directors acting under the very bsst legal adv'ca avaiUble. Overtures have been made to the shipping compa&i.s in London fo- amalgamating with tha Ocean B.aoh ll^friger.viing Cjmpmy, but th« directors have no information as to the basis on which tha proposals are made. Considering tha position of the company to be one of extreme gravity, the direefcorj have called the shareholders togfitlur, in order to give an opportunity of placing the finances of the company on h satisfarto.y bisis. Mr G. W. Nuhoi's Fcherau to meet the difficulty is briefly :— Write dovrn sbaros to £2 ; create 10,000 pieference shares a' £5 each to be first offered to c.ivh holder of a fu/ly paid-up share, oi which there are 8749 share 3, fcho shipping companies holding 4000, He proposes to call up £3 of the preference shares, IQi on allotment and 10d at interval-} of 12 months. Tbo preference shares would hs entitled to first dividend, say, up to 8 per coat. ; they would have as well a lien only subordinate to the bank overdraft •. in other words, they would rank as second mortgagees, only until the batik was paid <>ff Mr Nichol points out t*iat the present 8749 scares are at present wiludefs, but by writing them back to £3 and loadiog them with £2 uncalled expressed as a preference chare, with special privileges as to dividend and secured as well, these shares become distinctly valuable. The t^rms of payment, while bjing easy to the shareholder, at once establishes the company ia sound finance. Either this or some other scheme for increasing the capital of the company must be at once given effect fco, or liquidation will ensue, and Mr Nicbol think 3 every tffort should be exhiusied before eatertainiug liquidation. The Chairman (Mr Cuthbert Cowan) explained how the Bank of New Zealand, becoming dissatisfied with the company's position, had given them notice to pay up the Overdraft by the 22nd July, but had eince intimated to them <h*t if they would eirnestly entertain the pro r osaU and show a willingn ss to amalgamate with the O.em Beach Company they (the biuk) would givoa reasonable extension of time for completing auch negotiation?. The meeting lasted for a long time — over three and a-half hours— and at times verged upon being stormy. More or les3 indignation was expressed and visible throughout the whole proceedings, as ifc was made quite clear some power unmentioneci, but not unkcosw), pointed out two alternatives — amalgiraation or immediate liquidation. Tue following motion ivas maved by the Chairwsn .- — ''Seeing that the directoi'3 have failed to secure the guarantee of £10,000 demanded by the bank, this meeting is of opinion tbafc unless that amount or its equivalent is provided by reconstruction or otherwise on or before I lie 7th July next the directors should sea Whether satisfactory arrangements caauot be mads for amalgamation with tte Ocaau Boach Company." Oa a show of ban-Is this was rejected ia favour of au aoieudmenfe of Mr M'Queeu'e as follows ;~~" That a committee of

12 shareholders, with power to add to their numbsr, be appointed to take tho matter into consideration and report to a meeting of fhareholders." When tho chairman demanded a ballot, however, the motion was carried, by the help of proxies, by 360 to 21, many of those who had favoured Mr M'Queen's amendment having lef b tha hall before tha ballot was taken. In answer to question?, the Chairman laid they were informal from London by the shipping companies that they could not get further information until the Hon. Mr Ward returned to the colony, and thit the 7ch July had been fixed as the date for coneideriog the amalgamation, as that was the day Mr Ward was expected to arrive in New Zealand. Since the last annual meeting the financial position o£ the company had improved. They hid shipped 73,000 sheep and lambs, en which they had made a fair proflj. With regard to the Uwtuit against Ne'son Br>s., they were advised they had a gool ca c .c, and if they were forced into liquidation this action would be a valuable a< sat of the company. ETo had been informed on reliable authority that if amalgamation were given effect to fliareholdera would receive in return 12s 61 ia the pound, represented by • their interest in the new company, whereas in the event of liquidation he thought the result would be nil.