36
S..
10
(d) Would Government allow the Board to issue the £250,000 7 per cent. Debenture Stock which has been held in reserve, and which the Board agreed not to issue without the consent of Government?
(e) Would Government be prepared to guarantee a Bank Overdraft, or to allow the reserved £250,000 of 7 per cent. Debenture Stock to be lodged by the Company with their Bankers as Security for Overdraft?
7. So far as the writer can at present forecast, it would be prudent for the Board in London to make such arrangements as would ensure that, to cover the requirements of the Company over the next two or four years, the sum of £250,000 as a minimum, and £350,000 as a maximum, would be forthcoming.
8. In the event of an issue of Notes or Preferred Ordinary Shares being found practicable, it might be desirable to give an option to convert the same into Ordinary Shares after say 5 years, or, if Preferred Ordinary Shares be decided upon, to provide. if they be initially 6 per cent., that they rank for a further 2 per cent. of Dividend before the Ordinary Shares are entitled to more than say 6 per cent. Dividend.
any
9. It will be obvious to you that, having regard to the prior need of obtaining Government sanction, it will be impossible for my Board to initiate financial negotia- tions until they have information from Government as to the Government's views on the various points raised above. I should be grateful, therefore, if the Government would be kind enough to indicate their views as soon as is reasonably possible.
10. Meanwhile, we are completing the figures for the year ending 31st July, 1931, and hope to forward these in the course of a few posts.
I have, &c..
ARNOLD B. GRIDLEY,
Director.
11
is little more than a guess-to cover the probable effect of the Hydro Station being late, and the falling off in load growth aiready noticed between March and July, 1930. 7. The net effect of these conservative figures is that, under the worst conditions anticipated, we might be short of cash by £136,500—a part of which might be required by February, 1981.
S. In order to give you the further outlook as to possible cash requirements. especially that which may fall within the year 1931, we have pointed out in the summarized financial statement herewith that, if trade conditions improve, it would be prudent to provide for an expenditure over the next three years of £150,000 on additions and improvements at the two power stations, and on transmission and trans- forming equipment. Such expenditure would only proceed as and when it became absolutely essential, and as and when proved to be so to Government, assuming Government provide financial assistance."
9. I trust that the foregoing gives the information required by Government, and in the form desired.
10. I would add that it is the intention of the Company and the staff to do everything possible to secure additional load in spite of the present depression, and that every effort will be made to secure a gross revenue of £360,000 during 1931, as thereby cash requirements would be substantially reduced, viz., by about £100,000.
11 In my letter of the 26th May, guidance was sought from Government on certain points affecting plans for future finance. As soon as the views of Government have been given, I shall hope to be able to formulate alternative plans for the con- sideration of Government.
I have, &c.,
ARNOLD B. GRIDLEY,
Director.
། ། ། ། །
CUBLIC RECORD OFFICE
Reference
C.O.882/12
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIL- | | COPYRIGHT-PHOTOGRAPH-NOT TO |
PUBLIC RECORD OFFICE, LONDON,
سم
1..
SIR,
Enclosure 3 in No. 1.
THE PERAK RIVER HYDRO-ELECTRIC POWER COMPANY LTD.
Ipoh, Perak, 29th May, 1930
GROSS RECEIPTS
Possible Cash Requirements.
The Chief Secretary to Government, Federated Malay States, Kuala Lumpur.
I HAVE the honour to send herewith the information asked for by Government
at the Conference at "Carcosa,' on 13th May.
2. We were asked to give an estimate of the probable working results for the financial year ending 31st July, 1931, and to make this estimate as conservative as possible, on the assumption that there might be little or no improvement in the price of tin for some time to come, and that, in consequence, it would be difficult to maintain our former rate of growth of load, and, therefore, gross revenue.
3. We were also asked to leave out of account whether or no the £850,000 loan would entirely defray the capital cost of the present Scheme when finally completed. We do suggest, however, that it would be prudent to include some estimate of the extent to which cash resources must be encroached upon owing to the later coming into operation of the Hydro Station than was anticipated when estimates were last made towards the end of 1929. This delay means not only the cost of burning coal, but maintaining construction staff at the Dam for some time longer than it was hoped would be necessary.
4. We have taken tin at average prices of £150, £160, and £170, respectively. It was suggested that we should take £140 for the worst probable condition. After consideration, we feel that we cannot do this. We know fairly accurately the con- ditions at £150. Below this price, there are too many "unknowns " to enable us to make any forecast we could justify. We obviously cannot tell for how much longer some of our existing Chinese consumers can hold out. Should tin remain for long in the neighbourhood of £140 or less, our cash requirements might be increased. 5. On the other hand, there is a possibility, if not a probability, that tin might materially improve in price between now and the end of July, 1931, and, in such an event, our cash requirements might be sensibly diminished.
6. We have shown that, under the worst conditions anticipated, the trading results for the year 1931 might leave us short of cash to meet the interest and redemption liabilities for that year by £96,500 with tin averaging £150 per ton. In this. we have excluded the Preference Dividend, which is cumulative, and which could only be paid out of earned profits. We have, however, added £40,000—which
WORKING COSTS
GROSS PROFITS
Less-FINANCIAL CHARGES.
ESTIMATED IN DECEMBER,
1929.
PRESENT REVISED ESTIMATES.
Tin @ £185. Tin @ £150. Tin @ £160. Tin @ £170.
£
£
£
£
429,000
260,000
290,000
303,000
103,000
122,000
122,060
123,500
326,000
138,000
168,000
179,500
£
5 per cent. First Debenture Interest 62,500 Sinking Fund..
5 per cent. Interest on Federated
7
35,000
Malay States Loan of £850,000 .. 42,500 per cent. Debenture Interest
94,500
234,500
234,500
234,500
234,500
91,500
96,500
66,500
55,000
40,000
40,000
40,000
£136.500
£106,500
£95,000
Add-Estimated effect of Hydro station being late and falling away in load growth.. CASH POSSIBLY REQUIRED DURING 1931
(excluding Preference Dividend)..
In addition, if conditions improve; it would be wise to provide for additions to equipment over the next three years-working capital of say £150,000.
Enclosure 4 in No. 1.
NOTES OF A CONFERENCE WITH SIR ARNOLD GRIDLEY ON THE FINANCIAL POSITION OF THE PERAK HYDRO ELECTRIC COMPANY AT CARCOSA ON THE 25TH JUNE, 1930.
*
Present:-
The Chief Secretary.
Honourable Mr. H. G. R. Leonard.
The Acting Treasurer.
The Director, Electrical Department.
Sir Arnold Gridley.
THE Chief Secretary to Government opened the discussion by referring to
Sir Arnold Gridley's letters of 29th May and 26th May. The estimates attached to