BP’s New 1-for-3

City Interest In BP’s New 1-for-3 Share Issue

BURNS Philp and Co. will raise its paid capital to £4,000,000 with a new proposed issue of 1,000,000 £1 shares at par, at the ratio of one-to-three held on July 29.

The announcement has caused some speculation in Sydney as to the big company’s intentions.

The purpose of the issue was not disclosed when the announcement was made, and while some have accepted it as an indication of the company’s intention to expand, others, more conservatively, believe that the extra capital is required to replace some of the company’s existing shipping fleet.

It is pointed out that Burns Philp has had to meet tougher shipping problems than other Australian ship-owners as it has to compete on services where rival companies have the advantage of foreign registry as against BP’s Australian registry and the con ditions that that imposes. In ad dition, the company no longer receives the subsidy it received pre-war for services to the islands.

In re P° rt to shareholders in 1954, Mr. James Burns said that it would cost about £A1,250,000 to replace the aged Merkur on the Singapore run and that he was anything but happy about the prospect.”

Shipping is still very much interwoven with BP business, in spite of the company’s policy of investing in country retail businesses m Australia, and in the 1941 purchase of the big Imperial Arcade (including the Arcadia Hotel) property in Sydney. Little has been done with the latter property (it cost BPs £600,000) and there is speculation as whether it will be resold or whether a super store will be erected there.