Shareholders' Meetings of the Hermand Oil Co. Ltd.(1890)

type: Companies - shareholders' meetings

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The report of the HERMAND OIL COMPANY (LIMITED) is as follows:-

The directors herewith submit the balance-sheet as at 31st March, 1892, with the auditor’s report thereon. They regret that the working during the past year has resulted in a loss. The balance appearing at the credit of profit and loss account at 31st March, 1891, was £7410 8s 10d. It was ascertained, however, last autumn that an error had been made in the measurement of a shale bing, causing an over- estimate of shale in stock at 31st March, 1891, of £1800. There were also certain fixed rents paid, which, though redeemable by future workings, in terms of the leases must, from the state of trade as now emerged, be deemed as practically irredeemable.

These for the years 1889 and 1890 amount to £800-£2600; thus reducing the above credit balance to £4810 8s 10d. The loss on the working during the past year, exclusive of the sum of £2600 above mentioned, amounts to £2900 14s 5d. Troubles were encountered in parts of the Hermand shale field, increasing the costs and diminishing the products. The costs of wages and coals were also exceptionally high.

The available capital of the company was diminished by the insolvency of a deceased shareholder who held 29,245 shares of £1 each, on which 15s per share only was paid, and the remaining sum of 5s per share, amounting to £7311 5s was uncalled and unpaid, and who was also due to the company for share premiums and interest the sum of £6575 12s 5d. The latter sum and the uncalled capital amount to £13,886 17s 5d. The directors concurred with the other creditors of the deceased in a composition arrangement, under which, inter alia, the 29,245 shares were surrendered. This surrender diminishes the liability of the company to its shareholders by £21,933 15s.

During the latter part of last year the prices of oil products materially fell, and the Scotch companies by arrangements with American producers required to restrict their production. There ceased to be a market for selling crude oil at remunerative prices, and the prices of refined products also fell, so as to discourage the immediate starting of the refinery even if the company had been Is a position to do so. The expenditure on the refinery at Walkinshaw since the company acquired it amounts to £13,044 7s 3d, and some further expenditure - probably of £5000 - is necessary to set it in working order. This expenditure to the extent of £6181 4s 3d was met by funds received as part of the Walkinshaw Company's undertaking.

Then a considerable amount of capital is required for working a refinery, covering the interval to elapse during refining operations, and thereafter till the refined goods are sold. The company were due on Debentures the sum of £23,810, and from the depressed state of the oil trade no lengthened renewal of these Debentures could be arranged. It became necessary to provide for them and other obligations of the company by calls on the shares which were not fully paid up. Calls of 1s per share, payable on 11th March and 13th May respectively, were made, and a call of the remaining 3s per share, payable on 15th July next, has been made.

The directors, after conferring with some of the larger shareholders, decided to close the works for a time to wait a revival of trade. The mines are kept so that they may be opened up when it is decided to do so. The directors hope that the present, although a severe depression, will prove to be only a temporary depression of the oil trade, such as have occurred at intervals during its past history.

The directors regret that on the appeal of Messrs Young & Beilby, the House of Lords have (since the close of the balance sheet) reversed the decisions of the Lord-Ordinary and of the Second Division of the Court of Session in favour of the company in the action to determine whether the retorts at Hermand fell within the patents of Messrs Young & Beilby. The result is that the company will be liable to pay the patentees' royalties on these retorts and the costs. The formal judgment has not yet been issued. The royalties payable are fixed according to the tonnage of shale. The accounts of expenses have not yet been lodged or audited. A sum of £2400 or thereby may be required to meet these.

Mr John Wilson, M.P., intimated his resignation as a director on the 2d April, 1892, and Mr Matthew Gemmill Wilson also intimated his resignation as a director on the 5th April, 1892. After conferring with a committee of shareholders, the directors resolved to recommend the appointment of Mr David Russell and Mr William Logan (two of the committee) as directors. The share qualification of a director is, under article 107 of the company's articles of association, the holding of 5000 shares. In accordance with a joint resolution of the directors and of the committee, the directors recommend that the qualification be reduced to the holding of 500 shares, and that article 110 relative to directors remuneration be amended. The notice calling the meeting has been made to include an extraordinary meeting of the members to pass a special resolution to effect these alterations.

Pending the appointment of Mr Russell and Mr Logan, they have attended the meetings of the directors as advisers to be consulted by the board. The directors' recommend the election of Mr Russell and Mr Logan as directors. They also recommend the re-election of Mr T. A. Craig, C.A., Glasgow, as auditor.

Glasgow Herald 17th June 1892




The report by the directors of the Hermand Oil Company states that the authorised capital of the company was 350,000 shares of £1 each, of which 315,000 were issued, but of those 29,245 were surrendered, and 13,034 were forfeited.

On both of those classes there had been 15s per share paid. There is at present a balance at debit of profit and loss account of £18,515 0s 5d.

The works of the company have remained closed during the past year as well as in the year 1892, the state of the oil trade and the company's position preventing their being reopened and carried on. The expense of the caretaking of the works, and payment of fixed rents for fields not worked, and the taxes, have had to be met, while no revenue has been received. The company's lease of the Hermand minerals terminated at Martinmas last, and as the company had to remove their plant by Whitsunday 1894, it has been deemed advisable to sell it along with the workmen's houses on the ground. As a break occurs in the company's lease of the Hartwood minerals at Martinmas next, the directors have given notice of termination of the contract for that then.

The company still hold the lands of Easter Briech under lease from Lord Roseberry; Mid Briech belongs to themselves, and Wester Briech is still held under lease from Strong's trustees. In Mid Briech the borings show a field of very good shale. In present circumstances the board cannot recommend a reopening of the works.

West Lothian Courier, 28th July 1894



The annual meeting of the Hermand Oil Company will held on 3d September next, and the directors have just issued the report and balance sheet down to 31st March last. From this it appears that the company’s works at Briech are still closed, but in view of the improvement in the oil trade the Board hope soon to be in a position to resume operations, and meantime the properly is being carefully attended to.

The plant on the Hermand portion of the company’s properly has been sold, and all disputes in connection therewith arranged with the proprietors. The Hartwood section of the company’s leased ground has been relinquished, in virtue of a break in the mineral lease, and the company still retain the lands of East and West Briech, held under a lease, as these contain the same class of shale, and can be satisfactorily worked with the company’s own property at Mid-Briech.

Last year boring operations took place on the Mid-Briech property, and the results of these, as verified by Williamson, Miller, Robertson, M.E., Edinburgh, show that the valuable seam of “Fells Shale” underlies the whole of Mid-Briech; while the Broxburn and Dunnet seams will also be found underneath. The Fells shale alone is likely yield 686,000 tons, a supply sufficient for the company’s retorts for 10 years to come; while the Broxburn seam alone is calculated to yield 780.000 tons of shale. Owing to the great coal strike of 1894 and the severe frost of last winter, the Walkinshaw Brickwork shows a loss £638 19s 5d, but this portion of the properly now yields a fair profit. The company’s capital, including certain unpaid rents and accounts, now stands £306,842 6s 5d, while the balance at debit of profit and loss account the close of the financial year amounts to £22,245 15s 1d.

Linlithgowshire Gazette, 31st August 1895




At a general meeting of the shareholders of the Hermand Oil Company (Limited), held in Lyon & Turnbull’s Rooms, Edinburgh, yesterday afternoon – Mr D. Stewart, chairman, presiding – the annual report, already published, was adopted. After a long discussion, it was unanimously agreed that the directors were quite right in keeping the works closed until there was an improvement in trade. Mr James Ross, sen., 23 Bath Street, Leith, was appointed a director, and Mr William Logan, coalmaster, Polmont Station, was reappointed a director.

The Scotsman - Wednesday 30th December 1896




The annual general meeting of the Hermand Oil Company was held in Lyon & Turnbull’s Rooms, George Street, Edinburgh, this afternoon - Mr David Stewart presiding. The report stated that the directors were fully alive to the desirability of resuming operations, but owing to the depression in the oil industry, they had delayed commencing operations until the prices obtained will give a reasonable prospect of the work not being carried on at loss. The report was adopted. Mr Stewart was re-elected elected a director, and that concluded the business.

Edinburgh Evening News, 23rd December 1897





A meeting of shareholders of the Hermand Oil Company, Limited, was held yesterday in Lyon & Turnbull's Rooms, George Street, Edinburgh, to consider the advisability of restarting the works. The report, which was submitted, stated that to assist them in arriving at a decision the directors had thought it well to take expert advice. The directors had accordingly obtained a report, which was of such a nature as to justify them recommending the restarting forthwith of the works, more especially as they had subsequently been able to conclude arrangements with the landlords whereby a substantial reduction had been made in the rate of lordship in the shale.

There was a large attendance at the meeting, over which Mr David Stewart presided. The Chairman, in opening the proceedings, explained the steps that had been taken with the view mentioned in the report, and stated that as the funds at the disposal of the directors were almost exhausted, and in order give the works a chance of being carried on satisfactorily in the event of a reconstruction, further capital would be necessary.

He also mentioned that it had been thought advisable to have an addition to the board, and consequently Mr Ebenezer Chalmers, Leith, had been asked and had consented to join the board. He moved the adoption of the report, which was agreed to.

The Chairman then called upon Mr Chalmers to explain to the meeting his proposed scheme of reconstruction. Mr Chalmers said that he had only consented to join the board on two conditions—first, that active operations be resumed at the works; and. secondly, that the company be reconstructed. He had recommended that all previous reports regarding the works be put aside, and that a new and independent report be obtained from some qualified expert. This had been done, and he quoted from the expert's report passages indicating that the retorts and machinery were in a satisfactory condition.

As they were all aware, the authorised capital of the company was £350,000 in shares of £1 each. From these, 42,279 shares had to deducted, which had been either surrendered or forfeited. The shares, therefore, that fell to be dealt with under any reconstruction scheme amounted 272,721. The liabilities of the company, apart from outstanding shares, were exceedingly small. There were no Debentures or Preference shares, and the annual charge on the works was £2000. His proposal was that the present share capital be divided by five. The nominal capital the new company would then be £70,000 in place of £350,000 and in exchange for the shares presently issued, the new company would issue 54,544 shares of £1 each, credited as 16s 8d paid, thus leaving a liability of 3s 4d each on each of the new shares, which should provide a sum of something like £9000. In addition, the company would have 15,456 shares to issue when required. He did not see any reason why these shares should not be easily disposed of at par, providing a total working capital of £24,000. They did not anticipate, however, that anything like the full amount would be required at present, and it was probable that one-quarter, or, at most, one-half, would all that was necessary.

Mr Chalmers concluded by moving that the meeting approve of the proposals set forth, and that an extraordinary meeting of the shareholders be called to consider them further. Several shareholder expressed a strong desire to learn the name of the expert whom Mr Chalmers had quoted, but the chairman said would be unadvisable to divulge his name at the present stage. This did not satisfy the shareholders referred to, but the only information forthcoming reply to their queries was that the reporter was a manager who had a thorough practical knowledge.

After several other questions had been asked, a motion was made to adjourn the meeting without approving of the scheme, but on a vote Mr Chalmers' motion was carried. It was explained that the motion did not commit anybody to the scheme. Mr Chalmers election to the directorate was afterwards approved, and Mr Russell re-elected.

Edinburgh Evening News, 24th December 1898



An extraordinary meeting of the Hermand Oil Company, Limited, was held in the rooms of Messrs Lyon & Turnbull, George Street, Edinburgh, yesterday afternoon—Mr David Stewart, the Chairman of the Board of Directors, in the chair.

The object of the meeting was to pass resolutions with the view of the reconstruction the Company. A resolution was submitted the Chairman—“That it is desirable to reconstruct this Company, and accordingly that this Company be wound up voluntarily; and that William Logan, coalmaster, Edinburgh and Polmont, be, and he is hereby, appointed liquidator for the purposes of such winding up.”

The name of the new Company was, on the suggestion of Mr W. H. Hunter, made “The New Hermand Oil Company, Limited,” in place of simply “The Hermand Oil Company, Limited.” The motion was seconded by Mr E. Chalmers, and in doing so Mr Chalmers made some remarks in connection with the scheme of reconstruction. The proposals before them, be said, involved the reduction of the capital by four-fifths, and in the scheme a shareholder holding 100 shares in the old Company would receive for his holding 20 shares in the new Company which would carry a liability of 3s 4d per share, or a total liability of £3 6s 8d. The purchase price of the entire assets of the old Company amounted to roughly £45,500, and at that figure he ventured to think the new Company were getting a thoroughly good bargain, and should be quite able, in his opinion, if there was anything like the most moderate degree of prosperity in the oil trade, to earn substantial dividends for its shareholders.

In connection with the liability of 3s 4d on each new share, it was not intended to call up in the meantime more than one-fourth of that amount. There was intention the present time of issuing any of the surplus shares—that was the 15,455 shares that went to make up the total amount of the proposed authorised capital of £70,000. That would not be issued unless and until the money might be required.

The motion was unanimously agreed to.

Dundee Advertiser, 22nd February 1899