Information by drip from Nufarm the struggling crop protection group?
Monday the Melbourne-based company revealed that deputy chairman Doug Curlewis would retire after tomorrow’s AGM.
Yesterday it said it had fixed up a new banking arrangement.
That immediately raises the question, why weren’t the two announced together: the impact would have been a bit more dramatic.
The news saw the shares rise 10c yesterday to $4.55. That’s a 25c rise in two days.
In its latest statement Nufarm said that it had arranged a new $900 million loan that will refinance the agrichemical company’s existing debts due to expire on December 15, 2010.
"Along with $200 million in regional banking facilities, Nufarm’s debt funding would be around $1.1 billion.
"The new loan through Rabobank, ANZ Banking Group Ltd, National Australia Bank Ltd and HSBC would expire on December 15, 2011.
"Nufarm has commissioned Rabobank to complete a longer term debt facility, which would include a $300 million asset backed securitisation facility and a $600 million medium term syndicated bank debt facility."
Nufarm managing director Doug Rathbone said in the statement the company was simplifying its banking arrangements.
"With this new facility in place and the appointment of Rabobank, we can focus on managing our global business and rebuilding returns to shareholders," Mr Rathbone said in a statement on Tuesday.
"Following a detailed review of the company’s capital structure and funding requirements by external advisers, Nufarm considers that this is an appropriate level of funding to meet the current and future growth needs of the business.
"The interest margin on the facility will be broadly consistent with the interest margin that Nufarm paid on its facilities for the 12 months to July 2010.
"All the costs associated with the bank debt refinancing will be expensed over the next 12 months," Nufarm said.
The company said it expects to update the market on its first quarter performance and the progress of its Strategic Review at its Annual General Meeting to be held tomorrow.
So does that mean no news today?
But analysts pointed out this was a very temporary bit of debt.
It is $300 million smaller than the previous debt, it’s only for 12 months, meaning the company has no long term debt, and there was no news on whether it is secured.
For that amount of money, it would be. No mention of a dollar figure for the costs of the refinancing either, which would tell us what sort of risk the banks see Nufarm as having at the moment.
