HONG KONG DAILY PRESS, WEDNESDAY, MARCH 25, 1931.
NEW (ADDITIONAL) ISSUE
CHINA REALTY COMPANY
Federal Inc., U.S.A.
8 per cent. Ten Year Debentures
Dated April 1, 1931
BUSINESS -
Tls.
4,500,000.00
Due April 1, 1941
Issued in denominations of Tis, 100 and multiples thereof, registered as to principal and interest. Interest payable semi-annually on April and October 1st. Callable at 102 as a whole, or in part by drawings, at option of the Company any time after April 1st, 1936, and before maturity “by giving ninety (90) days' notice to this effect in two newspapers of general circulation in Shanghal
The following information has been furnished by F. W. Sutterle, Esq., President of the China Realty Company, Federal Inc., U.S.A.:
THE CHINA REALTY COMPANY is one of the oldest Real Estate Companies
in Shanghai.
Its business is that of Realtors, acting as the medium for bringing buyers and sellers together on a commission basis?
2-As the Company are not Investors, properties are only purchased in case of a forced sale and/or the seller wishing to sell and realize quickly and/or locating a cheap and desirable property and then only at prices which will admit of a quick resale plus a reasonable profit for the Company..
3.-Loaning money on mortgages and assigning and/or selling mortgages to investors Therefore their assets are always in Cash, Mortgages on first-class real estate and Properties purchased at cheap prices.
Company total capitalization, 1930, was:---
Share Capital
Debenture issue,
Accounts December 31st, 1930, show:-
Cash Property Mortgages
TIs.
2,000,000
3,000,000
Tls. 5,000,000
Tls.
109,892
1,742,320
3,519,380
Tls. 5,471,592.
from which it will be seen that, the entire Capital and Debentures were represented, in Mortgages on first-class real estate, Cash, and Properties bought at cheap prices and also that Tis. 519,380 of the Company's Capital was invested in Mortgages over and above the Debenture issue of Tis. 3,000,000.
4.
The Company acts as Agents, taking complete control of Estates for property owners, and at December 31st, 1930, were Agents for and collecting rentals of 174 different estates. These collections amounted (1930) to Tls. 148,000 a month or Tls. 1,775,000 a year.
RENT COLLECTION :---
A comparison with 1929 shows:-
Number of Foreign houses
Chinese houses
1929 1930 Increase
558 1065 1990
507.
2138
148
!
2548
· 3203
655
REGISTRATION :----
December 31st, 1929, there were 738 properties December 31st, 1980, there were 919 properties registered in the name of the Company, all of which means a larger clientele and increased goodwill for the Company besides bringing an income of over Tis. 19,000 for the year 1930. The Company in over 20 years has negotiated more than sixty millions in mortgages, all of which, principal and interest, has been repaid, and total business has been well over One Hundred Million Taels.
If the past 5 years or the time the Company has been operating under the United States Federal Trade Act, the volume of business as shown by the books has been Tls. 65,554,780, and for 1930 Tls. 29,294,789.
DIVIDENDS. EARNED AND PAID:
The Comparative statement Dividends Paid from October 1st, 1925, to 31st
December, 1930.
Period
Months
Capital
Dividend Paid
11025 to 31/12/26
15
Tls. 250,000
51.07%
*1 127 to 31 1227
12
500,000
75%
Taels 127,675.00 3,750.00
*1 128 to 311228
12
500,000
20.00%
-100,000.00
129 to 311229.
12
500,000
45.00%
130 to 31. 330
4/30 to 31/1230
500,000) 29.23% 2,000,000)
255,000.00 475,000.00
Tls. 931,425.00
5 years 3 months average 27.819% per annum.
***1927.—Business" of "all nature at Shanghai was affected by unsettled political
conditions.
*1928.-Conditions were not normal until May.
1930.-Increased resources could only become fally productivé gradually,
Opens March 31st, 1981 — 10 a.m.
||
TRANSACTIONS IN SHARES OF THE CHINA REALTY COMPANY for the period April 1st, 1929, to February 24th, 1930, shows business of 1,013,500 shares (Par Tls. 10.00), Tls, 16,400,000 or an average of Tls. 16.18. The turnover was more than five times the total issue of 200,000 shares of the Company,
PURPOSE OF THE ISSUE:—
As a result of its long experience, the Company has developed a large staff of realty experts who have a thorough and intimate knowledge of local conditions and underlying trends. There now appears to be a vital need for the further extension of its activities, particularly in the creation of an efficient Real Estate Trust service with simple and efficient methods of the handling of the mortgage business.
In 1930 the Company negotiated mortgages
On loans less than 54 per cent. of value.
Average rate of interest 9.18 per cent.
Commissions earned Tls. 122,316-1.215 per cent.
Tls. 10,052,040
The volume of business could have been much larger had the Company greater resources to take advantage of opportunities when offered.
Of the above mortgages, negotiated, 1930 Company assigned to investing clients
Tls. 10,052,040.
6,532,650.
December 31st, 1930, Company was carrying Mortgages...Tls, 3,519,380
COMPANY'S OBLIGATIONS:
Debentures will have a direct obligation of the Company, and though in order to allow the Company entire freedom in mortgaging, selling or otherwise dealing with its various holdings they are not given lien on specific property, their claim upon all of the assets of the Company will be prior to that of the stockholders Tls. 5,000,000 par value.
*
The debenture interest is a first charge on the Company's earnings and from the record as above of the past five years' business of the Company's dividends paid, should prove the earnings very much more than sufficient to pay interest and with the security of Tls. 5,000,000 capital back of the Debentures should make them EQUAL TO THE BEST INVESTMENT OFFERING OR OBTAINABLE AND AT A RATE OF 8 PER CENT. PER ANNUM, PAYABLE SEMI-ANNUALLY.
On the Shanghai Stock Exchange, the last business done on China Realty Company's Debentures was Tls. 102.
With the proceeds of this issue the Company will be able to greatly increase its turnover, thereby developing a larger clientele and securing considerably more commission income. By careful selection of such mortgage loans in both large and small amounts, the Company will create a portfolio of wide diversification as to location of property, amount of loan, maturity, etc., which will enable it to handle the requirements of its many clients desiring mortgage loans and/or investments without the vexatious delays that are now so common in financing of this kind.
Although the Company has been advised that these Debentures could be disposed of at a lower interest rate, it wishes to continue the present policy exemplified in its previous issue, of gaining goodwill and co-operation by sharing its success with those investors whose money has made these profits possible.
While the Company is free to pledge any specific part of its holdings at any time in the ordinary course of business, so long as any of these Debentures remain outstanding it will not create any other series of debentures or bonds with priority over the present issue.
The Company has also agreed to observe a ratio of 60 per cent. between the amount of debentures outstanding and its total working capital (i.... the par value of it com- mon stock and debentures), and any increase in the amount of debentures must be accom- panied by a proportionate enlargement of the common stock. Thus assuming that the entire working capital of the Company is invested in first-class mortgages for about two-thirds thé value of the underlying property, the holders of the present debentures will be advancing but 60 per cent. of the actual amount of the loans outstanding or approximately only 40 per cent. of the value of the properties under lien to the Company,
SUBSCRIPTIONS
Closes March 31st, 1981 —
3 p.m.
In the event of oversubscription the Directors reserve the right to allot in the order received or pro rata proportionately.
Subscriptions will only be received at-
HONGKONG AND SHANGHAI BANKING CORPORATION
SHANGHAI
Application forms may be obtained from Messrs. BENJAMIN & POTTS, Ice House Street.
This Debenture issue has been underwritten by:--
BENJAMIN & POTTS
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