Peruvian Corporation

The Peruvian Corporation Ltd. (alternate: Peruvian Corporation of London)[1] was registered under the Companies Act in London on 20 March 1890. Its board of directors included ten members led by Sir Alfred Dent, G. A. Ollard, of Smiles and Co. Solicitors, was manager in London, T. E. Webb was Secretary, with Clinton Dawkins and William Davies (nephew of W. R. Grace and of Grace Brothers – Callao) as the first representatives in Peru. The company was formed with the purpose of cancelling Peru's external debt and to release its government from loans it had taken out through bondholders at three times (in 1869, 1870, 1872), in order to finance the construction of railways.[2] The main purpose of the incorporation included acquiring the rights and undertaking the liabilities of bondholders.

History

After winning independence from Spain in 1826, Peru was financially strapped. Over the decades financial problems worsened, and Peru needed money. In 1865 then 1866, bonds were issued that were retired with new bonds in 1869. More bonds were issued in 1870 but the 1869 bonds were not addressed. New bonds were again issued in 1872 and again previous bonds were not addressed.

A major problem, that would take many years to resolve, was that the rich guano deposits were used as security on all the bonds. Peru struggled to make bond interest payments but on 18 December 1875, Peru defaulted. The War of the Pacific (1879–1883) made matters far worse for the country and its creditors, and by 1889 something had to be done about the situation.

In London a group formed the Peruvian Corporation to try to resolve the issues and recoup invested money. The objectives of the company were extensive. They included the acquisition of real or personal property in Peru or elsewhere, dealing in land, produce, and property of all kinds, constructing and managing railways, roads, and telegraphs, and carrying on the business usually carried on by railway companies, canal companies, and telegraph companies. It also was involved in constructing and managing docks and harbours, ships, mines, beds of nitrates, managing the state domains, and acting as agents of the Peruvian Government.[3]