Evening star., 1937-06-12
$1,9DQ,0DO ISSUE
OF FSTOCKPLANNED
BY GAS COMPANY
Having Dropped $780,.
600 Plan, Firm Would
Sell 10000 Shares.
MARKET CONDITIONS
BRING new PROGRAM
Certificates to Sell for sos Will
Bear 4lh% Interest, Have
Voting Rights.

intended to reconstruct its entire
financial structure. now desires only
to issue 10000 shares Of preferred
stock with a market value Of $780,.
600, the Public Utilities Commission
was informed yesterday.
Robert o. Overs, vice president
and treasurer OF the company, said
the original program was temporarily
dropped because Of "the present un.
favorable condition Of the bond mar.
ket," The revised plan will be con.
sidered by the commission Monday.
The 10000 shares Of preferred stock
which the company now desires tc
issue, Overs said, would be sold
through local dealers, who will act
rs agents of the company, withou,
an underwriting.
The stock, which would pay divi.
dends Of ~ per cent, would have
full voting privileges, Overs said, anc
would be exchangeable for present
common stock on share for share
basis.
To Sell 1T S95 Minimum.
The company still retains the pro-
vision in its original program calling
for splitting present outstanding COM
mon stock on q three share for lone
basis. When this is done. Owerl
said. one share Of the proposed new
preferred stock could be exchanged
for three shares Of common.
The new preferred stock under the
present program, Overs said, woulc
be sold for not less than sos . share
1t would have = redemption price OF
Sl05. In the original petition TO,
financial reorganization fled last
March the company proposed to sell
$500 900 worth OF preferred stock at
par OF 500 and with q redemption
price OF $l07.50.
When the company filed its first
petition 1t proposed in a separate pc.
tition to purchase the Hyattsville and
Alexandria Gas Cos. from the Wash
ington and Suburban Co.'S, the parent
trust, for $l,250,000, or 12,500 shares
Of 500 per share preferred stock.
Since then. Overs pointed out, the
local company has Withdrawn the
offer to pay the trust cash and offers
them only l2,500 shares Of preferred
stock. He pointed out that the
reduction to $s5 OF the par value OF
the proposed preferred issue would
mean = reduction in price for the
Hyattsville and Alexandria COM
panies.
Market Not to Be Affected.
Any stock paid for merging the
companies, Overs said. would be is
sued in addition to the proposed
10000 new shares. So that the local
market would not be affected, the
Washington Suburban Cos. would
keep its preferred stock intact while
the first issue was being noated
Overs explained.
In its original proposal the COM
pany stressed Its desire to retire out
standing bonds in the amount OF
$ll, 100000. which now draw inter.
est Of per cent and ~ per cent
with refunding bonds worth $10,000,-
900, which would earn interest OF
~ per cent.
At the same time the company
proposed to issue $500, 900 worth OF
new preferred stock to pay of out
standing bank loans and meet ex.
pansion costs.
Overs said that the company now
has bank loans totaling $3.50, 900 which
1t hopes to defray with returns from
the sale Of the 10000 shares of pre-.
ferred and at the same time raise
sufdcient funds to meet necessary ex.
pansion costs.
Won't Delay Expansion.
Temporary abandonment Of the
large-scale financing program will moi
delay any necessary plant expansion
Overs pointed out, but will NEAR
that the company will be forced tc
continue paying higher interest rate.
In Its operating costs than it believed
are necessary.
When first announced the large.
scale financing program was believed
to be a step toward freeing the loca
gas company control OF the Washing.
ton and Suburban Cos, . common.
law trust representing the Chase
Bank and associated interests.
As far back as last August the
Washington and Suburban Cos. pro.
posed to sell its $4,000 Of the exist.
ing 100000 shares Of common stock
provided the Washington company
would buy from the parent trust the
Hyattsville and Alexandria companies
At that time trust officials asked
N.375.000 for the two suburban com.
panies and declared that they would
not take stock In the Washington
company In lieu OF cash. The Public
Utilities Commission rejected thu
proposal.