Mexborough & Swinton Times, February 11 1927
Proposed Colliery Combine
Denaby and Cadeby
Major Leslie Explains the Scheme
A New Holding Company.
A meeting of the holders of ordinary shares of the Denaby and Cadeby Main Collieries, Ltd, was held on February 3 at the Cannon Street hotel, E. C. by order of the Court of Railway and Canal Commission, to consider a scheme for the partial amalgamation of the Company with the Rossington Main Colliery Co Ltd., the Dinnington Main Coal Co Ltd., And the Maltby Main colliery Ltd., in accordance with the provisions of the Mining Industry Act, 1926.
Major John Leslie, D. S. O., MC (chairman of the company), who presided, said:
“We are here today to consider the scheme of partial amalgamation referred by the Board of Trade to the Railway and Canal Commission for confirmation by the court under the provisions of the mining industry act 1926. That act expressly authorises a partial amalgamation of colliery undertakings by the vesting in a separate company out of the control of the consistuent companies. It was decided, having regard to all the circumstances of this case and the difficulty with dealing with the various mining leases held by the constituent companies, that it would be better to retain the consistuent companies as separate entities and affect their amalgamation as a partial amalgamation, carried out by the formation of a holding company which would acquire a controlling interest in the shares of the constituent companies, rather than to adopt a total amalgamation scheme which would have involved the liquidation of the existing companies and the taking over of the physical assets by an amalgamated company.
The Proposed New Company
All of you will have received the Board’s circular of January 10, containing in outline the principal features of the scheme so far as affecting the ordinary shareholders of this company, and, with the notices convening the meeting, you have received prints of the scheme for partial amalgamation and prints of the application for the confirmation of this scheme, which I presume you will be willing to take as read. (Agreed).
You may wish, however, to have some further particulars of the capitalisation of the proposed holiday company and of their provisions made by the articles.
The nominal capital of the holding company – the Yorkshire Amalgamated Collieries Ltd – is £5,000,000, which is divided into 4,000,000 ordinarily shares of 1 pound each and 5,000,000 deferred shares of 4s each. It was thought prudent to divide the valuation figures into ordinary and deferred shares, as we thought it would be unlikely that we could pay a dividend on the deferred portion of the capital until the developing collieries were contributing to the combine by way of income what is expected of them.
You will have observed from the application that a considerable expenditure will have to be made in the development of the Maltby and Rossington areas, and that some time must necessarily elapse before these two companies become profit earning.”
Details of Share Groups, Capitalisation, Dividend Rights, Directorate and Support of the scheme followed (provided on application)
Policy for the Future.
“There are two schools today in the coal industry – those who believe that we should continue on the lines of the last hundred years, and those who believe that modern development and evolution of the industry require larger units, concentrated management, and cooperative selling.
Your directors feel strongly that as an outcome of the last 12 months the men have done their share in and endeavouring to restore the industry to prosperity, and it is now up to the owners to do whatever lies in their power to get the best results out of the business, both for the shareholders and the men.
The men’s wages are so vitally affected by the selling of their product, from which they receive 9d out of every shilling (75%), that we feel sure you will appreciate our efforts on their behalf in trying to concentrating larger units and endeavouring to stabilise the price of our company by intergroup arrangements as to sales. It is proposed that the Denaby staff shall take over the management of Maltby colliery, which is situated close to Denaby, so as to divide the work equally between the two groups to be amalgamated.
As the Denaby company remains a separate entity, the debenture holders are entirely unaffected by the scheme; their security remains intact. As regards the preference shareholders, it was thought desirable, as none of the other three constituent companies has preference shares, to leave our preference shareholders out of the scheme. The only provision in the scheme which at all affects the preference shareholders is the proposal that this company should joining a joint and several guarantee.
Major Leslie finished by expounding on the new companies Borrowing Powers, Anticipated Output and the Proposed resolution.
Result of Voting
The Chairman subsequently declared the result of the voting to be as follows:
Proxies had been received for 985,787 shares in favour of the scheme and there had voted at the meeting 4 shareholders , representing 14,700 shares, in favour of the resolution, making a total of 1,000,457 shares in favour.
The chairman declared the resolution carried.