Click image to open full size in new tab
Article Text
# THE CORDAGE REORGANIZATION.
A PRELIMINARY REPORT ON THE COMPANY'S CONDITION.
Copies of the preliminary report of the convention of the National Cordage Company were circulated yesterday among certain banks interested in this company and among a number of operators in Wall Street. The report is signed by the members of the Reorganization Committee, George C. Magoun, Ernest Thalman and Gustav H. Gussler. The report is preliminary to the reorganization of the company. The report proposes the issuance of $6,000,000 of first mortgage collateral trust bonds, to run for thirty years at 6 per cent. Of this amount $5,000,000 is to be taken up immediately and $1,000,000 is to remain with the trustees subject to a two-thirds vote of the directors. This reserve is intended for use in paying off prior liens on the Union Mills.
The capital of the reorganized company is to consist of $8,000,000 8 per cent cumulative preferred stock and $20,000,000 of common stock. This will start the company anew without any indebtedness and with a good working capital. The bonds are to be offered to the subscribers of the plan of reorganization at 85, less a commission of 5 per cent. The stockholders can take the bonds at 85 and the outside public at a price yet to be agreed upon, but not less than 85. The reorganized cordage company is to consist of some twenty companies, eight of which have come in under a long lease. The valuation of the plant has been put at $15,000,000, or about $1,500 a spindle. This is said to be a much lower valuation than was usually put upon it. Some of the new companies that have been taken into the reorganization scheme value their plants at from $3,500 to $6,000 a spindle. If the reorganization plan goes through it is probable that there will be a financial manager for the company, who will look out for the interests of those whose money will be put into it, leaving free those members of the company who are acquainted with the cordage business to manage that end of it.
It is probable that Henry Allen & Co., the firm of bankers which went under through the National Cordage "slump," will resume business next week. The firm sent out yesterday a circular to its creditors for their signatures to an agreement to accept 50 cents on the dollar. There is little doubt that all of the creditors will sign this paper.
