The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1905-05-20
OL "A AND THE PUMA
PLAN AT|ON DEAL
Mr.. Damon Protests and Mr.. Dillingham; Ex-
plains McStocker's Explanation.
interesting Business Meeting.

for some weeks past been engaged in
possible in the disposition of the Puma
plantation. In SO doing 1 have
primarily been acting in the interests
of the Puma bondholders. In the
course of my work it has grown upon
me- however, that the interests of the
Olaa Sugar company will be much
better served by its securing the own
ership of Puma, rather than to make
total loss of its investment therein
of approximately $500, 900, if it can be
done on advantageous terms, especial
ly as the interests of the Puma bond
holders can at the same time be pro-
! tected
Various plans have suggested them
! selves and been rejected, but the fol-
lowing has impressed me so strongly
that L feel it my duty to myself and
the other stockholders in Olaa, and
| to its creditors, to present it to you.
The proposition referred to is as fol-
lows:
1. The Puma bond issue is $500, 000
1 hold an option on Sc bonds of a par
value of $56,00O at SO 1-3 per cent equal
to SIS, 666 66, in cash.
This leaves $444,000 par value of
bonds to be dealt with.
I 2. About one-half of this amount is
owned by the Bank of California. the
! San Francisco Savings Union and the
! Croker w oolworth National Bank
A large portion of the other one-half
| is pledged as security to a syndicate
consisting of ten of the leading banks
and capitalists of San Francisco.
8. L cannot assure you that it can
be done, but 1 believe that if your
company will offer the holders of said
/ bonds Olaa stock at par, for said bonds
4 at par. l. e., 22,200 Olaa shares for 444
/ Puma bonds, they can be induced to
accept the same.
1 urge upon you that you make this
offer, for the following reasons:
| CAD The present Puma crop is con-
servatively estimated at $4,000 tons of
cane. At present prices the receipts
therefrom by the receiver will be a lit
tie less than $500 per ton. equal to say
$4,000
His expenses 1 estimate as follows:
ID Receivers expenses to time
of harvesting ...-......-....$ 30u00
(2l Harvesting $4,000 tons of
cane say 55c.. Observation-Disclosures. 1850
90 Railroad freight on $4,000
tons of cane say 55c...... 1880
ca Other expenses not includ-
ed in above, allowing for con-
tingencies, say ...........- 10000
Total estimated Receivers
expenses. ,.............$ $500
Estimated net balance in hands
of Receiver after paying all
tn ha TO
holders, say 1902, 500
CD If Olaa becomes the owner OF
all of the Puma bonds, it would then
receive this sum of s1O2, 500.
The only cash expenditure which it
would have to make would be the said
sum of S,666.66 for said sc bonds.
Deducting this amount from $102,500
will leave in round numbers $S40O
The Olaa company will then own as
a result of the transaction:
% The Puma plantation free of in
cumbrances.
CD $4,000 in cash.
Co Oiaa stock is now selling for
$3.50 per share. Allow that it is at
present worth $40 a share, this $4,000
would represent $500 shares at SO a
share representing par value of
$16S, 900.
Deducting this number of shares
from the number of shares above sug-
gested to be given, viz: 22,200, leaves
1880 shares of a par value of $216,O00
The proposition, therefore, resolves
itself down to the following equiva-
. lent, and you will be in the same rela-
tive position as though you should:
I'D Sell S400 shares for SO a share
in cash.
(2) Give 1890 shares of Olaa stock
for clear title to Puma plantation.
| Cd The Olaa plantation is, and, I'M
less the bonding proposition hereunder
suggested is carried out. must for some
! years to come continue a heavy Dor
! rover.
! The above banks and capitalists en-
/ brace practically all of those in San
9 Francisco having financial connections
with Hawaii. If these banks and
/ capitalists are heavy losers on Puma,
whether Oiaa is responsible therefor or
not the relationship between the two
| enterprises has been so close that Olaa
credit will suffer therefrom and it will
; be embarrassed in its borrowing
ability. On the other hand, if these
same banks and capitalists are large
/ STOCKHOLDERS In Olaa- their every inter
est will be served by helping Olaa
! along.
CE) The present debt due the agents
will not, in ordinary course, be wiped
out before the latter part of 1907. If.
! then, we include the probable profits
of the crop of 1905. the entire outstand
ing bonded and open account debt, in
Guiding agents account, can probably
be liquidated by refunding ne present
! bonded debt and other debts by a new
| bond issue of $1,000, 900.
If the financial concerns and in
| dividuals interested in the Puma bonds
! have made recent loss on a Hawai-
| ian bond issue. they will naturally feel
! sore and disinclined to have anything
| to do with another.
If, however, they feel that they have
| been fairly treated and that by as
| sistfng in floating a new Olaa bond is
| they will he bplni0o them SaIUpS