The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-05
WAY PREPARED
TO EXTINCUISH
COSACH DEBTS
Contract Made for Ex-
change of Bonds for Liens
of New Company.
BY HOWARD CARSWELL
Times Special Writer

NEW YORK, Nov. 5.-A major
preliminary step has been taken
toward overhauling the capital
structure of the Chilean nitrate in
duStry, it was learned today. In
dentures have been signed providing
for an exchange of per cent I'M
secured debentureS for both prior
secured and simple obligations for
secured per cent gold bonds of
the Inflated Nitrate Corporation of
Chile, popularly known as Cosach.
The diSSoluticu of CoSach by
Chilean law has been primarily due
to the depression AMI political COM
plications Before the development
of synthetic nitrates, Chiles great
supplies of natural nitrate were a
virtual world monopoly.
Guggenheims Agree
The deal, in which only the Chill
can government and private inter-
eSts identified in the segregated
companies formerly constituting Co
sach are involved. relates to prior
secured CoSach bonds of f2726, 100
amount issued in Britain and $685.
036.00 issued in the United States.
In addition there have been out
standing $70,0OO,OOO par value of
secured Co5ach bonds, of which
S40,000,000 were held by the Chilean
treasury and S30,000,000 by private
interests. The Guggenheims are
the principal private interests con-
Of Of
Anglo Chilean Nitrate and Lautharo
Nitrate Co., LtG. The foregoing is
sues have been in default since 1892.
Separation Completed
Pursuant to a new Chilean law,
reorganization of the nitrate in
dustry upon dissolution of CoSach
has brought about the following
segregation into separate units, with
production quotas being given in
percentages:
Lautaro Nitrate Co.. Ltd. ............ 36es
Antofagasta .................... 3lea
Anglo-Chilean Nitrate ............... $50
independents 10
The Chilean Nitrate and Iodine
Sales Corp, quasi-governmental
sales monopoly. was set up. Out of
its profits Is per cent go to the
Chilean government and from the
remaining rs per cent of profits the
servicing of the bonded debt is to be
achieved.
Company Gives Security
The outstanding prior secured 7
per cent bonds of $2,726,000 and
$35 ,036,000, due 1948, are changed for
| 5 per cent debentures of equivalent
amount of the new Chilean Nitrate
and Iodine Sales Corp, the sales
monopoly. A cumulative l per cent
provides for amortization. The de-
bentures are issued AS of Dec. 81,
1888, and mature June 30, 1868. In
| tereSt and amortization are pay
able out of rs per cent of the sales
organizations profits.
OF the $70,O0O,0O0 secured Cosach
bonds, the Chilean government cam
GELS its $4O000,00O amount. The
private interests" involved cancel
their remaining $30,000000 and re-
ceive in turn an equal amount Of
simple contract obligations of the
segregated companies who contrib
uted their assets to the defunct
COSach
Glyn, Mills & Co., British trustees
for the sterling prior secured bonds,
signed the indenture, as of Wednes-
day. The American indentures were
signed yesterday by Guaranty Trust
Company as trustee for the dollar
bonds
This operation is believed to pre-
sage later reorganization Of Anglo
Chilean and Lautaro companies.