THE NORTHWARD EXPANSION 437
In
the light of the facts that Rhodesian Anglo American and Rio Tinto
combined were predominant in R.C.B.C.-N'Changa, while Rhodesian Anglo
American in effect controlled the Bwana M'Kubwa company, the ultimate
outcome of any conflict could not be in doubt. But there was conflict:
two out of the twelve directors were opposed to the scheme, Mr. R. E.
McConnell, representing American interests, and Sir Henry Strakosch,
representing the Union Corporation, and as the Union Corporation had
been a member of the 'all-British group' which had come to the rescue
two years previously, and as Sir Henry Strakosch was an important City,
as well as South African personality, any opposition on his part and on
the part of the corporation he represented could not be disregarded.35
The resolutions were carried. The salient features of the scheme were that the capital of R.C.B.C. was increased to £2 million by the issue of an additional 1,250,000 shares of £1 each. These new shares were to be issued
(a)
to the extent of 550,000 shares, in acquiring the mining and
prospecting and certain other assets of the Bwana M'Kubwa company,
which thereupon became a pure holding company;36
(b) to
the extent of 126,000 shares for the purchase of the shares of the
N'Changa Mine, while the balance was to be utilized for the general
purposes of the company.
The
scheme also provided for the issue of an additional -£6,000,000 of
convertible debentures carrying 7 per cent interest, and convertible at
certain (rising) prices into shares up to a date terminating in 1940.
These debentures were to be offered to the shareholders (up to an
amount of £4,500,000) pro rata to their holdings of shares.
Rhodesian Anglo American and the banking firm of Messrs. J. C. im Thurm
& Sons Limited agreed to underwrite these debentures for a
commission of 3 per cent. The contingent risk of finding the 'new
money' required was thus assured by these two firms. It became
necessary, as already mentioned, for Rhodesian Anglo American to issue
£1,500,000 of its
35 A
very lengthy interchange of letters had taken place in the spring of
1930 between J. S. Wetzlar and Sir Henry Strakosch. The main points at
issue were two: the dissentients were not satisfied with the findings
of the R.C.B.C.-N'Changa experts (which of course included Dr.
Bancroft) as to the real value of the N'Changa Mine, while they also
objected to R.C.B.C.-N'Changa being saddled with the task of further
financing the Bwana company at a time when R.C.B.C.-N'Changa did not
need immediate finance.
36 Rhodesian
Anglo American subsequently made an offer to the outside shareholders
in the Bwana M'Kubwa company to exchange their shares for R.A.A.
shares; 92 per cent of the shareholders by value accepted: the
remaining shares were acquired by legal right and the company entered
into voluntary liquidation (R.A.A. report for the year ending 30 June
1935).
