FREEZING MERGER

Wanganui Chronicle, Volume LXXXIII, Issue 19846, 21 May 1927, Page 7

FREEZING MERGER

WAINGAWA TO CLOSE Shareholders Endorse Directors* Suggestion CAPITAL FOR WELLINGTON COMPANY. [Per Press Association.] MASTERTON, May 20. A meeting of 200 shareholders of the Wairarapa Frozen Meat Company to-day decided, by 32,085 share votes to 1610, to confirm the provisional agreement entered into by the company with ffio Wellington Meat Export Company for the merging of the companies, which provides that the Wairarapa company will not renew its lease of the Waingawa works from, the Bank of New Zealand. Mr W. D. Hunt, chairman of directors, explained that the company had arrived at a stage where it either had to exercise the option and purchase the works from the bank for £135,000, or to abandon the lease. In view of the unsatisfactory output at Waingawa, the directors recommended the latter policy and the directors could not see any hope of increasing the supply of stock under the present conditions of freezing, and not dealing on their own account. The overhead cost was so high that they could not induce support with rebates such as other companies were giving. They could not hope to conduct the works profitably in competition with economically-run port works. Ngahauranga, with its own output and that of Waingawa combined, could work almost to capacity and would thus be able *c reduce freezing charges considerably and handle stock at a price as low at any of its competitors. Under the agreement, Mr Hunt said, the Wairarapa shareholders invest £SJ,000 in 8 per cent, cumulative preference shares in the Meat Export Company It was pointed out that had not the Meat Export Comapny invested in the Kaikariki works, which it had to close down, the company would to-day have been as sound as any works in New Zea land. The £50,000 of Wairarapa capita; would enable it to practicaly clear iti liability to the Bank. Those townspeople of Masterton and Carterton who had no desire to invest m the Wellington company had been offered par value for their shares, plus 6 per cent, interest. Replying to a question as to whether, another company could work, and what likely action ‘ the Meat Board would take, Mr Hunt said any action by the Meat Board was purely a matter of a license to export. Anyone could operate the works, and the Government had the matter entirely in its own hands. The function of the Meat Board merely amounted to a recommendation, which Cabinet was not bound to accept. There was nothing to stop another company opening at Waingawa, but he failed to see how they could get sufficient stock to run the works economically.