PORT CHALMERS GAS COMPANY.

Otago Witness, Issue 3327, 19 December 1917, Page 7

PORT CHALMERS GAS COMPANY.

An extraordinary meeting of shareholders in the Port Chalmers Ga 3 Company was held on the 12th inst., and was attended by eight shareholders. Mr John Watson (chairman of directors) r resided. The Chairman said thcr meeting had been called to consider the position of the company, and more particularly to pass a resolution, if it was thought desirable, to increase the capital of the company. Ho would formally move: "That the capital ot the company bo increased to £BSOO by tho issue of 2500 new shares of £1 each, to be called preference shares, and to confer on the holders thereof a fixed cumulative preference dividend at the rate of 6 per cent, on the capital for the time being paid up on such shares, free of income tax, and such shares to rank in the winding-up cKf' the company, both as 10gards capital and dividend, in priority to the other or ordinary shares in the company, but not to confer any further right to participate in profits or surplus assets or any right Of voting at any general meeting of the company, unless on questions specially affecting them. And that such shares be payable in four instalments of 5s per share at intervals of not less than ono month each, and be offered for subscription in the first instance to the existing shareholders in the company." A report by Mr Hungerford (city gas engineer) on the Port Chalmers wo;ks stated that he valued the- -works at £5136, made up as follows:—Plant within tho works, £3170; mains, services, meters, £1966. The report continued: "The condition of the plant on the whole in the works is good; but the buildings are badly out of repair, and in some cases do not provide adequate cover for the plant to be protected. The reticulation '3 the particularly weak spot in your underr.iking. On the whole its condition is good, though some sections I inspected require renewing, but the size of the pipes oa er most of te district is much too small to maintain a satisfactory service." The Chairman stated that a circular calling the meeting had been sent to shareholders covering the terms of the resolution and inviting offers to take up the proposed preference shaves. No applications had been received. Mr W. Forrester asked if Mr Hungorford's valuation was the correct one, whether it would not be advisable to write off some of tho capital. He thought that beforo they set about increasing tho capital, the present capital should be reduced by the difference between Mr Hungerford's estimate and the amount standing in the balance sheet (the balance sheet for the year ended August 31, 1917, valued the buildings, plant, and meters at £8372 12s 3d). Dr Borrie said that taking the new price of coal they were practically going to work at a loss of £IOO per year. The price of -coal was not going to come down in the meantime. It was more likely to rise. The price of the gas was dearer than the electric light. Dr Borrie then read a letter he had received from a North Island shareholder. He said the letter practically expressed his own opinion, »and, judging by the lack of applications for preference shares by the shareholders, it appeared to him 'that they were also of the northern man's opinion. Tho letter read : " After carefully considering the proposal to increase the Port Chalmers Gas Company's capital by £2500 by issuing 2500 preference snares of £l each, and bearing in mind that the company's plant, etc., are valued by Mr Hungerford at £5136, as against £8372 shown in tho balance sheet as at August 31 last, I am decidedly averse to tho proposal. From all accounts the prospects of the company are not good in view of the fact that the Dunedin electrical supply is being extended to Port Chalmers. Ido not think it fair to tho present shareholders that the preference shares should be issued. Six per cent, could now be obtained for money invested on first mortgage and 7 per cent, on good second mortgages. I consider that the company thould go into liquidation, so that shareholders might receive as much of their capital as possible." Tho Chairman said he did not share the pessimistic views of the other shareholders at tho meeting. It was a pity that the capital of the shareholders should* be sacrificed. It might be advisable to reduce the capital of the company, but that would require another resolution. If the £2500 were subscribed, ho was of opinion that it would pay off their liabilities and leave them a certain amount to carry on. The £IOOO mentioned by Mr Hungerford as being necessary to put the_ reticulation in reparr could be obtained piecemeal. In answer to a question, tho Chairman said that not many shares were held in Port Chalmers. . Mr Young: It Is rather ominous when tho local people are not shareholders. You .can draw what you like from it. The Chairman said their troubles commenced when the electric light came in. and then 'the price of coal was raised. If the price of coal camo down they could make a profit again. He was very disappointed that the shareholders had not given any indication if they were prepared to simport the proposal laid out in the resolution, and it seemed 'to bo hopeless to try to carry on as it was. Ho was sorry for the shareholders, but it was their lookout. After a great deal of desultory talk, Mr LoCrcn said he would second the chairman's motion, which was then declared carried. It was pointed out that if the shareholders came to the rescue the company could carry on, but that if they did not it could go into liquidation. Mr Youn<r then moved— 'At the same meeting called on January 9, 1918, to confirm 'the resolution in re confirmation of increase of capital, or at a mooting to bo called directly afterwards, as the solicitors may advise, a resolution shall be moved putting the company into voluntary liquidation." . . Dr Borrie seconded the motion, which was carried.