26 NOVEMBER 1937, Page 36


The winding-up of the affairs of the E.D. Realisation company is proceeding according to plan, but that has not prevented the £t shares from falling to 38s., against 42s. 6d. only a week ago. Here, I consider, only the most pessimistic view of the trade outlook can possibly justify the current price. Under the scheme now set out in the official circular holders are to receive 5s. in cash, plus one and three-tenths ordinary £1 shares in the Union-Castle Mail Steamship Company in respect of every share held. When this has been carried through, there will remain a mass of comparatively small assets for disposal which are to be put in the hands of a liquidator and realised as opportunities offer for the benefit of E.D. shareholders.

If one deducts 'the 5s. to be received in-cash from the current market price of 38s. a buyer is clearly paying 33s. for one and three-tenths Union-Castle shares, plus the right to whatever further sum the remaining assets bring in. Now those remain- ing assets are not easy to value. They include, apart from a block of x3o,000 Li shares in Anglo-Foreign Properties and £82,000 of ordinary stock in the London Maritime Investment Company, a large number of freehold properties, mainly in Liverpool and the Canary Islands. One can only guess at the figure these assets may be expected to fetch, but as a safe minimum one may put it at £300,000. In relation to the Li,000,000 of E.D. Realisation shares in issue, that is the equivalent of 6s. per share: It follows, therefore, that a buyer at today's price of 38s. is, in effect, paying an estimated but in all probability a maximum 27s. for his one and three- tenths Union-Castle shares ; in other words, he is buying Union-Castle ordinaries at just over Li each.