CO885-(11-12) — Page 112

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י ועדי

RECORD OFFICE

---

Peference :-

LAMINC.O.882/12

|ALLY WITHOUT PERMISSION OF THE BI REPRODUCED PHOTOGRAPHIC- ¿COPYRIGHT PŇOTOGRAPH-NO] 10]

{ PUBLIC RECORD "OFFICE, LONDON

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by the Court of this procedure would be necessary under Section 56 of the Companies Act, 1929. In this way both the Preference and Ordinary Shareholders would con- tribute to the general sacrifice being made.

11. Provision of Further Funds. The whole additional amount required is, as has already been stated, in the aggregate £150,000. Anxious consideration has been given to the method of raising this capital, and owing to the Company's financial posi- tion and the depressed state of the tin and money markets, there is no possibility at present of obtaining this money by 21 public issue.

As, however, a very large portion of this additional sum, namely, £130,000, is needed in connexion with capital expenditure already made in this country, and as the remainder is expenditure which will assist the development of an important Colonial water power undertaking at a most critical period of its history, it is a type of expen- diture which would appear to fall within the provisions of the Colonial Development Act, 1929, and to justify a loan under that Act.

In these circumstances it is hoped that owing to the importance of the undertaking to the Federated Malay States and their tin industry, the British Government might be prepared to make an advance under that Act in order to tide over this very difficult period.

It is proposed, therefore, that as any application for such advances must under the Act be made by a Colonial Government--although such advances may be applied through any body of persons-the Federated Malay States Government shall be asked to be so good as to consider making application under that Act for a loan of the above sum for a period of seven years on the best terms obtainable. It is further proposed that such loan should be secured either by an extension of the present Federated Malay States Government Loan, or upon the £250,000 of uńissued 7 per cent. Par- ticipating Debenture Stock, or upon the £284,000 of unissued Ordinary Share capital, and that the advance be liquidated at the end of seven years (or earlier if possible) by the issue of the Federated Malay States Government or to the public of the equiva- lent amount of the unissued Ordinary Shares or of Preferred Ordinary Shares to be created for that purpose. Sections I (1) (i) and (2) of the Colonial Development Act, 1929, which are as follows, apparently apply to this case:-

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I. (1) The Treasury, with the concurrence of the Secretary of State for the Colonies, and on the recommendation of the Committee to be appointed for the purposes of this Act, may make advances to the tiovernment of any colony or of any territory to which this section applies, for the purpose of aiding and developing agriculture and industry in the colony or territory, and thereby pro- moting commerce with or industry in the United Kingdom, by any of the following

means:-

(a), (b), (c), &c.

(i) The production, distribution and supply of electricity.

C

(2) Advances under this section may, subject as hereinafter provided, be made either by way of grant or by way of loan, or partly in one way and partly

in the other, and on such terms and subject to such conditions as the Treasury may think fit, and may be applied by the Government to which they are made either directly or through any person or body of persons."

12. The following summarises the effect of the proposals upon the Company's share and loan capital:

(a) 5 per cent. Guaranteed Debenture Stock.

Amount authorised and issued Rate of interest

Sinking Funds.-First instalment payable

Present

Position

£1,250,000

5 per cent.

31st January, 1931

(b) Federated Malay States Government Loan.

Amount

Rate of Interest

Interest payable

Repayment of loan in half-yearly instal-

£850,000

5 per cent.

Fixed charge

Position if proposals adopted.

£1,250,000

5 per cent.

31st July, 1938

29

Present Position.

(c) 7 per cent. Participating Debenture Stock.

Authorized

Issued

Fixed rate of interest Interest payable

Participating rate of interest Sinking Fund-First instalment payable Note. Proposed that £250,000, of this 7 per cent Stock held in reserve be utilized as security for new finance, pending permanent arrangements

(d) 8 per cent. Preference Shares.

Authorized and issued £1 shares.. Fixed rate of dividend

Participating rate of dividend Reserve fund

(e) Ordinary Shares.

Authorized issue

Nominal value of share Issued

£1,600,000 £1,350,000 7,per cent. Fixed charge

2 per cent. 31st July, 1934

£500,000

8 per cent. cumulative

Nil £15,000 per annum

£500,000

£1 431,237 of £1 each

Position if proposals adopted.

£1,000,000 £1,350,000

7 per cent.

To be satisfied in Certificates

of Rights if necessary up

to 31st July, 1933

2 per cent.

31st July, 1938

£500,000

6 per cent. non-cumulative Preferred Ordinary

Up to 2 per cent. Nil

Reduced to £250,000 and increased to £500,000

10/-

Leaving £284,381 10s. in 10 shares available for issue if required.

13. The following table shows in the first and second columns the costs and fixed charges and the equivalent number of K.V.A. required to be sold to meet the costs and fixed charges in respect of the arrangements now existing, each year during the period up to and including the year ended 31st July, 1933. The third and fourth columns show the costs and fixed charges which would have to be met and equivalent number of K.V.A. to meet those costs and fixed charges under the proposals contained in this memorandum each year during the period up to and including the year ended 31st July, 1937. In order to pay the interest on the Federated Malay States Govern- ment Loan and the 7 per cent. Participating Debenture Stock up to 31st July, 1937, it would be necessary to sell a total of 18,193 K.V.A. per annum. It should be noted that the present sales of power are in the neighbourhood of 11,000 K.V.A. per annum

Minimum operation and administration costs

necessary to maintain system ..

A

Present Position.

Proposed Scheme

up to 31st July, 1937.

Costs and K.V.A. to

Charges.

Costs and K. V.A. to Charges. be sold.

be sold.

£

120,000

6,836

£ 120,000

6,836

5 per cent. Guaranteed Debenture Stock interest

62,500

3,558

62,500

3,558

£182,500

10,394

£182,500 10,394

5 per cent. Guaranteed Debenture Stock Sinking

Fund

35,000

1,993

Federated Malay States

interest

Government

Loan

£217,500

42,500

£260,000

12,387

2,419

14,806

7 per cent. Participating Debenture Stock

Interest

To be satisfied in Certificates

of Rights if necessary up

to 31st July, 1933

14.

To be satisfied by Certificates of Rights (unless pro. fits available) up to 31st July, 1933; thereafter Federated Malay States Gov- ernment Loan and 7 per cent. P.D.S. Interest will be payable in cash from 1st August, 1937, Sinking Funds will commence.

The table in this paragraph gives a comparison of the number of K.V.A. necessary to be sold to meet the fixed charges and dividends upon the share capital in a full normal year (that is to say, under the existing arrangements the costs and fixed charges which would be required to be paid from and including the year ended 31st July, 1934), and in respect of the proposals as set out in this memorandum from

£850,000

5

per cent.

ments. First repayment instalment payable

31st July, 1934

31st July, 1938

94,500

5,380

£354,500 20,186