The Hawaiian gazette., 1905-05-23

erShip Oh fuHd, rather IMAM 10 make
a total loss of it's investment therein
of approximately 100000, IL 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 / feel it my duty to myself and
the other stockholders in Olaa, and
to its creditors, to present 1t to you.
The proposition referred to is as fol-
lows:
/. The Puma bond Issue is $500, 900.
1 hold an option on 56 bonds Of a par
value of $4,000 at SO 1-S per cent equal
to $1s,666.66, in cash.
This leaves $444,00O par value of
bonds to be dealt with.
2. About one-half of this amount is
owned by the Bank of California. the
San Francisco Savings Union and the
Croker Woolworth National Bank
A large portion of the other one-half
is pledged as security to syndicate
consisting of ten of the leading banks
and capitalists of San Francisco.
3. l cannot assure you that it can
be done, but I believe that If your
company will offer the holders of said
bonds Olaa stock at par, for said bonds
at par, |. e., 22.2OO Olaa shares for 444
Puma bonds, they can be induced to
accept the same.
l urge upon you that you make this
offer, for the following reasons:
(A 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 lit
tie less than $500 per ton, equal to say
$4,000
His expenses I estimate as follows:
~ Receivers expenses to time
of harvesting ...............$ 30 900
G) Harvesting $4,000 tons of
cane say OBSERVATION-DISCLOSURES. 1880
(3) Railroad freight on $4,000
tons of cane say soc. .......... 1880
(D Other expenses not includ-
ed in above, allowing for con-
tlngencies, say .............. 10000
Total estimated Receivers
| expenses. ...............S $500
Estimated net balance in hands
of Receiver after paying all
expenses, to be- paid to bond
holders, say .................Sl O2, 500
OBJ If Olaa becomes the owner of
all of the Puma bonds, 1t would then
receive this sum of s1O2, 500.
The only cash expenditure which it
would have to make would be the said
sum of $1S,666.66 for said Sc bonds.
Deducting this amount from $1O2, 500
will leave in round numbers $4,000
The Olaa company will then own as
a result of the transaction:
% The Puma plantation free of in
cumbrances.
! (2) $4,000 in cash.
(C) Olaa 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 $40 a
share, representing a par value of
$16S,0O
| Deducting this number of shares
from the number of shares above sug-
gested to be given, viz: %, 200, leaves
1880 shares of a par value of $276, 900.
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:
% Sell $500 shares for $40 share
! in cash.
(2) Give 1880 shares of Olaa stock
| for clear title to Puma plantation.
Cd The Olaa plantation is and, I'M
less the bonding proposition hereunder
| SnpUpStpH iS nDrriaH fnr
years to come continue a heavy bor-
rover.
The above banks and capitalists en-
brace practically all of those in San
Francisco having financial connections
with Hawaii. If these banks and
capitalists are heavy losers On Puma,
whether Olaa 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 it's 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
(E) 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 the present
bonded debt and other debts by a new
bond issue of S2,OO0,000
If the financial concerns and in
dividuals interested in the Puma bonds
have made a recent loss on a Hawai-
ian bond issue. they win 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
| sisting in floating a new olaa bond is
sue, they viii be helping themselves,
every motive of self-interest will cause
them to assist in floating the new bond
I issue, and with their influence the
placing OF a $4,000. 900 bond issue would
be successful as of course.
| Without their support IL is more