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FINANCE - THE BILBAO IRON ORE COMPANY LIMITED

See also:
The Granada Railway
The GSSR
The Bacares Iron Ore Mines
The Hornillo Company
The Manila Railway Company
The Seville Tramway Company

The Bilbao companies are only of interest in that they are where Edmund Sykes Hett started his business in Spain before creating The GSSR. From the scant data, it seems that the Bilboan mines were somewhat more profitable than those served by The GSSR.

Below are the verbatim reports from the press.

NOTE: the text has been copied exactly, including some unusual punctuation.

DATEPRESS REPORTS

1881

From THE SHEFFIELD DAILY TELEGRAPH 2nd April 1881.

THE BILBAO IRON ORE COMPANY,

LIMITED


ORDINARY SHARE CAPITAL, £500,000, FULLY PAID.


ISSUE OF £100,000 5 PER CENT. DEBENTURES

Part of £130,000 to be secured by a First Charge upon the entire Railway, Rolling Stock, Wharves, and other Properties of the Company.

PRICE OF ISSUE, 97 PER CENT.

Redeemable at par in about Eight Years by Half-yearly

Drawings.

DIRECTORS.-CHAIRMAN: Thomas Bland-Garland, Esq., Hillfields, Reading; Sir John Brown, Endcliffe Hall, Sheffield; Edward Woods, Esq., C.E. 45, Onslow Gardens, South Kensington, S.W.; Frederick Peterson Ward, Esq., 46,Hamilton terrace, St. John's Wood, N.W.; Edmund Sykes Hett, Esq., Parkgate, Chester; John Fair, Esq., 50, Hamilton terrace, St. John's Wood, N.W.

SOLICITORS.-Messrs. Crowdy, Son, and Tarry, 17, Serjeants' Inn, E.C.

BROKERS-Messrs. Greenwood and Co., 28, Austin Friars, E.C.; Messrs. Hunt and Moss, College Chambers, Rotherham.

SECRETARY.-Mr. Thomas Harrison.

OFFICES:-St.Stephen's Palace Chambers, Westminster, S.W.


The directors of The Bilbao Iron Ore Company offer for subscription the above amount of 5 per cent. Debentures. The proceeds of the issue are required for the purpose of completing the purchase of the vendor's (Sir John Brown and the Executors of the late Mr W. Fowler), rights and Royalties under the concessions for Mines, Railway and Shipping Port, &c., and for the repayment of existing Debentures.

The only Royalties other than those included in the purchase from the vendors are payable to the Spanish Concessionaires, and may be estimated to amount to a maximum of £5,000 per annum. In creating the above-mentioned Debentures the Company reserve the sum of £30,000, which will only be issued to extinguish these Royalties.

The properties above mentioned consist of-

(a) MINES.-The concession in perpetuity of the Mines known as “Galdames,” in the Province of Biscay, and the unexpired leases for about seven and eight years respectively of two Companil Mines in the Somorrostro district of the same province. These mines are being worked, and the Hematite ores they produce are in general consumption and of well-known value for the production of Bessemer Steel.

(b) RAILWAY.-A line of Railway of the most substantial construction with Steel Rails laid on down line connecting the Mines of Galdames with the port of shipment, the line being double for about half the distance, that is, from the point at which it serves as the outlet for the transport of ores from many of the mines of the Somorrostro district.

(c) ROLLING STOCK AND PLANT.-Seven powerful locomotives, with four Shunting Engines, five hundred Hopper Waggons, and ten Ballast Waggons and fixed Machinery.

(d) SHIPPING PORT.-This is situated at Portugalete, at the mouth of the river Nervion. The Wharf is provided with four Berths (having two Shoots each), at which four large Steamers can be loaded at the same time with great dispatch. There are also two other Berths for smaller Vessels.

(e) WORKSHOPS.-These consist of fitting, Smiths' and Carpenters' Shops, and Engine Shed, provided with Machinery and all appliances. There are also residenes for Managers, Workmen's Cottages, Offices, and Stores.

(f) STATIONS-In addition to the Terminal Stations there are two others with sidings deposits and loading stages for receiving ore from the Mines in the Somorrostro District.

(g) LAND acquired includes about 25 acres just beyond Portugalete, conveniently situated for the erection of Smelting Works, Storage of Ores, and other purposes.

The EXPENDITURE (as taken from the Balance Sheet at December 31, 1880), exclusive of large sums expended on Capital Account but charged to Revenue, is as follows:-

Land£27,466211
Railway288,277134
Rolling Stock60,642180
Plant, Machinery, and Tools21,325710
Quay and Harbour Works60,564170
Buildings and Workshops44,45790
£502,584131

RESULTS.-The Company's operations since 1877-the first complete year of working-show the following results:-

1877187818791880
Ores sold187,528270,763191,981233,307
Ores carried for others149,186121,636136,253306,000
Tons366,714392,399328,234539,307
Net Profits*£25,07325,88511,31381,519

*After payment of all Royalties, except those the purchase and extinguishment of which are now being provided for.

A large and growing share of the Company's Revenue is derived from the carriage of ores for other companies over the Company's Railway. The contracts already made, two of the largest of which have not yet come into operation, are for the most part for terms of years in excess of the period within which the extinction of the Debentures now offered will be effected.

The security of the Debentures will be a first charge upon the Railway, Land, Rolling Stock, Mines, and other properties of the Company above mentioned.

The debentures will be to bearer in sums of £100 each, issued under the Company's Seal, bearing Coupons payable half-yearly on the 1st January and 1st July, at Messrs. Robarts, Lubbock, and Co., 15, Lombard street, E.C

The Company will set aside the sum of £15,000 per annum to provide for the interest upon and redemption of the Debentures, which will be drawn half-yearly in June and December, and paid off on the following 1st July and 1st January respectively. First drawing, December, 1881. Final drawing June, 1889.

The Company reserve to themselves the right of paying off the Debentures at an earlier date.

The price of issue to be paid as follows:-

£5per cent. on application.
92per cent. on 14th April.
97

At this price (97 per cent.), and allowing for redemption at par by the operation of the sinking fund, the Debentures return an investor nearly 6 per cent.

Scrip Certificates, bearing Coupon for three months' interest to June 30, will be issued in Exchange for Bankers' receipts, and Debenturers with Coupons attached will be subsequently issued.

Prospectuses and Forms of application may be obtained at the Company's Offices; or, of the Brokers.

March 30, 1881.


SPECIAL ATTENTION is called to the statements in accompanying reports, viz:-(1) That Dividends amounting to £240,000 sterling have been paid on workings on only two of the seven lodes the sett contains, and that this was done when Lead was at about one-half its present price; (2) That these two lodes have only been worked on for about one-sixth of their length, and at a comparatively shallow depth; (3) That from the Western Ground, just added, Silver-Lead ore in large quantities can be raised almost immediately.

1890

From THE SHEFFIELD DAILY TELEGRAPH 14th March 1890.

BILBAO RIVER AND CANTABRIAN RAILWAY COMPANY.


The nineteenth ordinary general meeting of the above company was held yesterday at 9, Palace Chambers, Westminster, Mr. T. Bland Garland, chairman of the company presiding. The other directors present were Mr. Barnard Platts Broomhead, Mr E. Woods, Mr. F.P. Ward, and Mr. E. S. Hett. There was only a small attendance of shareholders.

The CHAIRMAN in moving the adoption of the report and balance sheet said they would observe that the capital amount now showed a debit of £437,000 instead of £492,075 at the end of 1888, the reduction being due to the second repayment of £1 per share, amounting to £54,675. On the other side the cost of the railway and works now stood at £391,176 instead of £433,176 at the end of 1888. The reduction had been obtained by writing off £42,000 from the profits of the past year to depreciation. The other items of the balance-sheet called for no particular remark. The gross revenue was £115,336 against £114,181 in 1888. The working expenses showed a decrease of £ 1,861 on those of the previous year, and amounted to 42.53 per cent. of the gross revenue. This, as compared with 52.68 per cent. in 1884, represented a saving in the past year of £11,355, or one-half of the dividend on the present capital, and the aggregate saving in the past five years had been £38,466. In the net revenue account there was a loss in exchange of £1,568 as compared with £780 in the previous year. At present he could see no prospect of an improvement in the rate of exchange, and he feared it might become even more unfavourable. The result of the year's work was that there had been a gross improvement of £3,015, reduced by net revenue charges to a net improvement of £1,562, which he hoped might on the whole be considered satisfactory. The shipments from Bilbao last year were, with the exception of 1887, the largest recorded, and, adding the mineral consumed in the local furnaces, the total output of the district was 4,350,000 tons. The total output to the end of 1889 amounted to 41,000,000 tons, 20,000,000 of which was in the last five years. Of the 3,901,511 tons shipped in 1889, 2,761,121 tons came to the United Kingdom, showing in increase for the year of 1,140,390 tons, being practically the same quantity as in 1888. Of their own group of consumers South Wales took about the same tonnage as in 1888, Scotland 526,000 tons, against 460,000, and the East Coast 1,261,000 tons 1,039,000 in 1888. The increased consumption in the two latter districts was no doubt due to their special output of steel for shipbuilding and other constructive purposes, and was a further proof that steel was rapidly taking the place of iron for general purposes, and there could be no doubt that so long as the Bilbao district continued to yield hematite ore there would be a good demand for it. Their business had been satisfactory during the past year, and he saw no reason for doubting that it would be equalled in the present year. The traffic return for January and February of this year showed an increase of 8,853 tons carried, and of £1,458 in receipts, and at the same time the stacks of ore had increased from 100,000 tons to 138,000 tons. They had again the pleasure of proposing a return of £1 per share-the third similar return within three years. Looking back ten years to the report presented in 1880, they would find that the total capital outlay which then stood at about £583,000, to-day stood at £391,000, and the reduction was exclusive of the purchase of the vendor's royalty charge on revenue at a cost of £67,000, while the property had in the same period been largely improved, and was in a better state than at any former period for the financial and commercial carrying on of the company's business.

The motion for the adoption of the report was seconded by Mr. BROOMHEAD.

General Sir R. R. GIPPS said the return of capital to the shareholders was a measure which had his approval, but he should like to know how far they intended carrying on this process. If they were going to return the whole it would make a great difference in the value of their property.

THE CHAIRMAN said the exhaustion of the mines in the district would render their property-he would not say valueless-but of very small value comparatively-and the object of the return of the capital was to meet the time when their property must cease to be of value, which must be the case some day, although he hoped that would not be the case for a very long time to come.

Mr. WOOLLEY said he warmly supported the action of the direrctors.

Mr. JAMES MACANDREW said he thought they were legislating too much for posterity, and he would rather that they had some more of the money for themselves.

Mr. FITZWYGRAM said the matter had already been dealt with, and he did not think it need be brought forward again until the shares were reduced to £5.

Mr. BROOMHEAD remarked that the directors in their discretion, and acting upon their best judgment in the interest of those whom they represented-and they represented the whole body of shareholders-were of opinion that having regard to the nature of the property, which must some day come to an end, were obliged, as honest men, to wipe off a certain sum as depreciation. They could not return this £42,000 as income, and it must be returned as depreciation. As prudent men they ought to provide for when the evil day came.

General GIPPS said he did not dispute the action of the directors. He only wanted to know when the depreciation would cease.

The report was then adopted.

A resolution was then carried declaring a dividend of 3 per cent. on the preference shares and 2½ per cent. on the ordinary shares, making, with the interim dividend already paid, respectively 6 per cent. and 5 per cent.

Messrs. Wood and Ward were re-elected directors.

The meeting afterwards resolved itself into an extra-ordinary meeting for reducing the capital as above estimated, and a resolution for this purpose was carried on the motion of the CHAIRMAN, seconded by Mr WARD.

The proceedings then closed with votes of thanks.






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