BOOTH, MACDONALD, AND CO.

Otago Witness, Issue 3672, 29 July 1924, Page 4

BOOTH, MACDONALD, AND CO.

THE RECONSTRUCTION PROPOSAL. CHRISTCHURCH, July 23. A special meeting of shareholders of Messrs Booth, Macdonald, and Co., manufacturers of agricultural implements, was held in Christchurch, to-day to consider the proposals of the directors calling for substantial sacrifices by both ordinary and preferential shareholders. The meeting was attended by about 20 or 30 shareholders. The proposals submitted by the directors were as follow:- —The ordinary share capital of £82,950, in £1 shares, to be reduced to £41,475, in 10s shares, fully paid, thus extinguishing the deficit of £41,475. Holders of preference shares—£97,62B at 6 per cent, and £96,635, at 64 per cent., to relinquish thenclaims to dividends accrued up to December 31, 1923. The rates of dividends on preference shares to be reduced as from January 1, 1924 to 51 per cent, per annum, dividends to be nan-cumulative. The rate of interest on mortgage debentures, £118,948 10s. bearing interest at 7) per cent, free of the income tax to 3s 2d in the pound to be reduced by 1 per cent. The meeting was held in private and no representatives of the press were allowed to he present, but Mr (I. T. Booth, chairman of directors, seen subsequntly by a reporter, slated that the general effect of the meeting had been satisfactory. The shareholders had realised the position, and had met it frankly.

It was subsequently ascertained from another shareholder that during the meeting criticism was directed to the purchase of land and the building of factories at Penrose at a cost of about £35,000 One shareholder considered that before mortgage debentures were issued, which rank before preference shares, the shareholders should have, been consulted. To this criticism the chairman replied that a considerable sum was owing to the bank at the time the debentures were issued. The scheme at Penrose then seemed a safe and good proposition. If debentures had not been issued, which gave some stability to the finances, the company Would have been responsible to the bank for a very large amount. Sir George Clifford, one of the directors, pointed out that when profits were available for distribution to ordinary shareholders the writing-down of the shares would not affect thu amount holders would receive from dividends. The proposal to reduce the ordinary shares from £1 to lfis was carried, and the preference - shareholders agreed to forego their claims for interest up to December 31, 1923, the proposal by the directors that preference shareholders should agree to a reduction of the rate of interest from 6 and 64 per cent, to Si per cent, was discussed, but was not put to the meeting in the form of a resolution. In its place a lesolntion was adopted, which has the effect that preference shareholders will agree to accept 51 per cent, in the meantime, but before there is any distribution of profits by way of dividends to the ordinary shareholders they shall be paid at the full rate of 6 and G£ per cent., according to the respective issues.