CO885-(11-12) — Page 117

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itar.

RECORD OFFICE

Reference -

TC.O.882/12

Preliminary.

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Enclosure in No. 6.

PERAK RIVER HYDRO-ELECTRIC POWER CO. LTD.

Draft Scheme of Arrangement.

(a) The Company has outstanding the following issues of Debentures:-

瘦

(i) 5 per cent. Guaranteed Debenture Stock authorized and issued, carrying a first fixed and specific charge on the Concession and the lands, fixed plant and machinery of the Company and a first floating charge on the remainder of the Assets of the Company present and future, including its uncalled Capital

(ii) 5 per cent. Federated Malay States Government Loan, carry- ing a fixed and specific charge on the Concession and the lands, fixed plant and machinery of the Company and a floating charge on the remainder of the Assets of the Com- pany present and future, including its uncalled Capital, sub- ject to (i) above

(iii) 7

per cent. Participating Debenture Stock, authorized £1,600,000, issued

Carrying a fixed and specific charge on the Concession and the lands, fixed plant and machinery of the Company and a floating charge on the remainder of the Assets of the Com- pany present and future, including its uncalled Capital, sub- ject to (i) and (ii) above.

(Note. A further £250,000 7 per cent. Participating Debenture Stock has been actually issued but is held in reserve by the Company.)

£

1,250,000

850,000

1,350,000

(b) Interest on the issues (i) and (iii) above is payable half-yearly on 1st February and 1st August and has been paid to 1st August, 1930. Interest on the Federated Malay States Government loan is payable half-yearly on 31st January and 31st July and has been paid to 31st July, 1930.

(e) The 5 per cent. Guaranteed Debenture Stock is repayable on the 1st February, 1951, by the operation of a Cumulative Sinking Fund which commences on 1st February, 1931.

(d) Federated Malay States Government Loan Repayment of this loan com- mences on 31st January, 1934, by equal half-yearly payments.

(e) 7 per cent. Participating Debenture Stock is repayable on or after 30th June, 1961, at 105 per cent. by means of a sinking fund commencing on 31st July, 1934.

Owing to the heavy and sustained fall in the price of tin. the producers of which are the principal consumers of current supplied by the Company in the Federated Malay States, the net earnings of the Company are at present insufficient to cover the annual charges for interest on the above Debenture Issues and to provide the Sinking Fund in respect of the 5 per cent. Guaranteed Debenture Stock, and the following arrangement is proposed.

have agreed, subject to this scheme becoming operative,

to procure to be made to the Company a cash advance of £250,000 to be secured by £250,000 5 per cent. Prior Lien Debenture Stock for the purpose of providing the necessary additional funds to deal with the existing trade creditors and to meet the amount by which the estimated earnings for the next three years are expected to fall short of the sun required for the service of the 5 per cent. Guaranteed Debenture Stock,

Scheme of Arrangement.

1. Scheme to become operative upon its being sanctioned by the Court so as to be binding upon the Company and the holders of the Debenture Stock Issues.

2. The holders of the above Debenture Stocks shall agree to the creation by the Company of £400,000 5 per cent. Prior Lien Debentures ranking in front of the 5 per cent. Guaranteed Debenture Stock, such Debentures to be secured by a first fixed and floating charge on the whole of the Company's undertaking and to be repayable by means of the Sinking Fund of £

per annum commencing in

Of these, £250,000 shall be issued immediately, the balance of £150,000 being held for future issue in case of need.

3. The interest payable or becoming payable by the Company on the Federated Malay States Loan and the 7 per cent. Participating Debenture Stock during the period from 31st January, 1931, to 1st February, 1934, both days inclusive (hereinafter

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called the moratorium period), and not yet paid shall only be payable to the extent to which the net earnings of the Company, as hereinafter defined, shall be sufficient to provide the same.

4.

The net earnings of the Company as from 1st August, 1930, shall be allocated as follows:-

First to payment of the interest accrued since 31st July, 1930, and during the moratorium period to the last preceding half-yearly date for payment of such interest and unpaid on the Federated Malay States Government Loan, and secondly, and subject to the prior payment in full of such interest on the Federated Malay States Govern- ment Loan, to the payment of the interest similarly accrued and unpaid since 1st August, 1930, and during the moratorium period on the 7 per cent. Participating Debenture Stock.

*

+

5. The expression net earnings of the Company shall mean the excess of the income over the outgoings of the Company as shown in the Profit and Loss Account of the Company commencing as from 1st August, 1930, and to be prepared in the usual manner. There shall be charged in such accounts as outgoings in addition to all other outgoings ordinarily chargeable to Revenue Accounts :-

(1) All expenditure of the Company upon repairs, maintenance, and renewals

of buildings, plant, machinery, and other assets.

(2) Depreciation upon such scale as shall be laid down by the Treasury in

accordance with their agreement dated 26th July, 1926.

(3) All annual sums requiring to be provided by the Company for service (interest, Sinking Fund, or amortisation) of any securities of the Company, including (after the expiration of the moratorium period but not during its continuance) the annual sums to be provided by the Company for service of the securities affected by this scheme.

6. The net earnings of the Company at, the end of each year commencing with the year ending 31st July, 1931, shall be ascertained as soon as reasonably practicable after the end of such year and certified by the Auditors of the Company whose certificate shall be final and conclusive as to the amount of such net earnings as against the Com- pany and all other parties interested in such profits. The net earnings as at the end of every year as and when ascertained and certified shall, within

there- after, be applied by the Company in or towards making the payments, to making which, such net earnings are allocated by Clause 4 of this scheme.

7. No dividend shall be paid on any shares of the Company during the moratorium period or thereafter so long as any interest on the securities affected by the scheme remains unpaid.

8 The obligations of the Company to make payments to the Sinking Fund for the redemption of the Federated Malay States Government Loan and the 7 per cent. Participating Debenture Stock, shall, in each case, be suspended during the moratorium period and for four years thereafter, but such obligations shall revive after 31st July, 1938. with all necessary adjustments as regards operations of the Sinking Fund, so as to provide for the redemption of the stocks four years later than at present provided. 9. Nothing in this scheme will affect any charge, lien. or security except as herein expressly provided.

C. 72367/A/30 [No. 144].

No. 7.

THE SECRETARY OF STATE to THE ACTING HIGH COMMISSIONER.

(Sent 9.40 p.m., 12th December, 1930.)

TELEGRAM.

[Answered by No. 8.]

No. 146. CONFIDENTIAL. Your Confidential despatch of 11th September, 1930.* Position of Perak Hydro-Electric Company was discussed at a Conference attended by High Commissioner and representatives of Colonial Office, Crown Agents, and Treasury. The Company cannot meet its liabilities in January. The Treasury declines to advance any new money or to postpone Sinking Fund in respect of first Debentures. High Commissioner stated on behalf of the Federated Malay States that

* No. 1.

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| PUBLIC RECORD OFFICE, LONDON,

|ALLY WITHOUT PERMISSION OF THE | COPYRIGHTTHOTOGRAPH-NOT TO BE REPRODUCED PHOTOGRAPHIC.-

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