sumitomo supports nufarm

http://fw.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/nufarm-debt-causing-jitters/1958795.aspx


Nufarm debt causing jitters
04 Oct, 2010 07:35 AM

SUMITOMO Chemical may have sounded a note of support for Nufarm chief executive Doug Rathbone, but that hasn't stopped investors worrying about the herbicide producer's long-term funding.

These fears were amplified after Sumitomo played down speculation of a full takeover in the short-term. Some had suggested the Japanese company, which bought a 20 per cent holding at $14 a share in April, might come back with a bid at about $7.


However, Sumitomo said last Friday it was not planning to increase its Nufarm stake even though creep provisions allow it to top up its holding by 3 per cent in a fortnight, The Australian Financial Review reports.


Nufarm is trying to bed down long-term debt by December 15 and the key focus is how much the banks charge to provide the funding.


Rathbone has said they are a long way from an equity raising (he passed the can around for $250 million earlier this year and $300 million in 2009). But the thinking is the banks are not going to tip in as much as they have in the past, leaving the market nervous that Rathbone will have to tap investors as part of the banks' demands.