Page 20, January . .,

business

The governmént is. now exchanging that demand note for 15 million BCRIC common shares, of which approximately 12 million are to be given to the residents of B.C. For the time being, the government will hold three million shares, or 20 per cent of the corporation’s initial capitalization.

ASSETS $400 MILLION

According to BCRIC’s president, David Helliwell, the gross value of the cor- poration’s assets (before deducting the liabilities of its subsidiaries) now exceeds $400 million. Their “book” value — that is, the value at which they are carried in BCRIC’s balance sheet, less liabilities — is between-$150 million and $180 million. These assets consist of:

(1) 9,888,203 shares, or 81 per cent of the outstanding ‘common stock, of Canadian Cellulose Co. Ltd. (CanCel). This company operates pulp mills at Prince Rupert and Castlegar, and its sales are

ae

‘. North Shore News

-Apiece of the ac

expected to exceed $200 million in 1979. The present market value of BCRIC’s shareholding in CanCel is approximately $84 million.

~(2) 100 per cent of the common shares of Kootenay Forest Products Ltd., a medium-size lumber and

plywood manufacturer |

located near Nelson. Its annual sales are ap- proximately $25 million.

(3) 100 per cent of the

common shares of Plateau Mills Ltd., a lumber producer near Vanderhoof, also with sales in the $25 million range.

(4) 3,471,375 shares, or, 10

per cent of the stock, of”

Westcoast Transmission Co. Ltd. Westcoast owns and operates a natural gas pipeline from northeastern B.C., supplying customers (such as B.C. Hydro) jn the southern portion of the province, and in the U.S. northwest. It is also a partner in the Alaska Highway gas _ pipeline project. This investment has a market value of ap- proximately $41.6 million.

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. (5) Oil and gas rights, which -cover 2.3 million acres in the general Fort St. John-Fort Nelson areas. They entitle BCRIC to enter into ex- ploration agreements on the land — called “farmouts” — with other companies. BCRIC is precluded by its charter from doing any work itself — its partners (“the farmees”) do the drilling at their own expense, in return for which they can earn an interest in the acreage and in any oil and gas that may be produced.

GAS FOUND

The ultimate value of this acreage will depend on the success of the various drilling programs. Helliwell announced recently that gas had been found in the first of three wells currently drilling the Fort St. John area. No further details are available yet.

BCRIC’s present income comes: primarily from dividends paid by CanCel and Westcoast Tran- smission. Based on _ the current dividend rates of these two firms, BCRIC’'s shareholdings generate

‘ about $5.7 million in annual

income. This income is not subject to income tax, in-

cidentally, because dividends paid by one Canadian company to

another are not taxable in the hands of the recipient company.

Helliwell has described BCRIC’s investment mix as “a blend of income yield

(Westcoast Transmission), immediate earnings growth potential (Canadian

Cellulose), and high return- high risk potential (oil and gas activity)”.

BCRIC does not intend to “stand pat” on its present asset base. Its president has said it will seek out further opportunities for investment — it is possible these could be in manufacturing as well as in resources development in British Columbia.

DISCOUNT PRICES

The pace and extent of the corporation’s future growth will hinge on its success in raising additional capital. As a first step, it will offer common shares from its

tion for all of US...:.

treasury at a price to be announced later. They will,. however, be priced at a discount from their ap- praised book value, which is

in the range of $10-$12 per —

share. . 7 The provincial govern- ment's initial 20 per cent interest in BCRIC will be reduced subsequently to the extent that additional shares. are a by the public.

How to

purchase an RRSP

By JIM ROGERS

Life insurance companies,

banks, trust companies and —

credit unions all sell in- dividual retirement plans, known

_commonly = as Registered Retirement Savings Plans (RRSPs)-

These plans all have a common purpose — to help individuals accumulate funds for retirement.

Because’ contributions made to an RRSP by an individual are deductible, within certain specified limits, from that individual's otherwise taxable income, such plans offer a means of reducing the taxpayer's income tax. The _at- tractiveness of these plans is further enhanced by the fact that any growth in an RRSP is sheltered from income tax until the RRSP is éither surrendered for cash or used to purchase an annuity or RRIF — in which case each payment is taxed as income when received.

The competition between the various types of com- panies which sell RRSPs is fierce. To understand all the various plans available is virtually impossible, especially with the abun- dance of competing ad- vertising and information you, as the consumer, are faced with. The following publication may be helpful, however, should you wish to compare the various RRSP plans available to you:

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The government will not-be. represented in BCRIC's management or on its board of directors.

At the next annual meeting, following com- pletion of the share issue, the new public shareholders will elect their own board of

directors (a shareholder must own at least 100 registered shares to be

“RRSP-RHOSP Funds

Performance Survey and Guaranteed Investment Annuities,” Pirbeck In-

vestment Measurement Ltd., Sun Life Building, Montreal, Province du Quebec.

The more general ways in which the various RRSPs differ are:

(a) Type of fund

The type of funds available include guaranteed interest, equity, mortgage or some combination. How do you feel about investing money? Do you like to be safe, secure — or do you prefer to take some risk in the hope of a greater gain? Your own answers deter- mine the kind of fund(s) you should consider.

(b) Fees or commissions

What amounts will be deducted from your deposits or your gain to pay the “handling charges?” In- stitutions don't handle your money for nothing. Either the return you are getting has been adjusted downward to allow the firm handling your RRSP to make its expenses and profit by the difference between the return paid to you and return it has received by investing your funds, or you are paying directly a commission or fee to the institution. Find out which it is and how much it is, in writing, before you decide to involve yourself in any particular plan. Satisfy yourself that you will likely get, your) money's worth (performance and_ service)

. Durrant’s article on

(c) Net projected yield

entitled to vote on nth company’ Ss affairs).

; The second article i series will describe ‘wha common shares are,. -ho their value is determined an how: they can be bough sold.

(The second part of P; trie

BCRIC. will appear week.)

before you put your firs dollar into anybody's RRSP

Subject to the level of guarantee, what net ret can you expect -Over various periods into the future? What has happened in ‘th past? The word “net” is used’ because

to reduce the tabular or. gross return, and it is the gross return which is most often quoted to a prospective RRSP customer.

Conclusion

A final piece of advice:

When considering the purchase of an RRSP a after having receiv

satisfactory answers to your questions, ask the company with which you are con- templating investing- your savings to provide you with a one-page summary

recommended plan or plans showing the projected cash-" in value of your savings after :: each of the first 10 years and: each 5 years thereafter until © your planned retirement — date. :

The deadline for RRSP : contributions which can be tax deductions against your | 1978 income is March 1, | 1979.

(The above ts the second and final part of excerpts from “Life Imsurance for, Canadians” (Self-Counsel Series) by Jim Rogers, a. Vancouver insurance consultant and broker.)

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