A LIQUIDATION . DEBENTURE
• Mr. Bruce Gardner's speech at the annual meeting of Armstrong, Whitworth Securities confirms the conclusion I drew some weeks ago that this company is moving steadily towards an orderly liquidation. As I anticipated, the funds derived from the sale of assets will be ample to cover the repay- ment at par of the full preference capital, the whole of which is held by two trust companies. The merits, as a short-term hold- ing, of the A.W. Second Stock Trust debentures have already been emphasised in these notes. These debentures, repayable at 'roughly £122, are not dear at L115, or 6 points above the price at which they stood two months" ago. The ordinary stock, now k140, should also be interesting in the light of its break-up
value of over L16o. •
The most interesting stock at the moment, -however, is the A.W. Consolidated StoCk Trust income debenture, quoted around ' This trust's' only- asset is a block of 750,ono Armstrong, Whitworth Securities £ z second preference shares
which, it now seems clear, will realise its full par value of £75o,000. Against this asset there is just over £r,000,000 of income debenture outstanding, indicating a liquidation valtie of just under £75 per k oo of stock. A potential buyer will ask : How long may one expect to have to wait for the money ? Will it take six months, twelve months, or two years ? Without any precise official guidance, I can only guess, but I should say "that repayment should be practicable within a year. If this fore- - cast is realised, a buyer would have a tax-free profit of, say, £8 on an outlay of £65, which would be the equivalent of investing for a year at over 12 per cent. tax free.
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