NATIONAL law firm Slater & Gordon says it is almost ready to begin action against Nufarm.
The action has been delayed because of its decision to expand the claim period in its shareholder class action following Nufarm's disclosure of higher-than-forecast net debt on September 1.
Slater & Gordon Practice Group Leader Ben Phi said he expected to formally approach the company in two or three weeks.
"If that discussion is unsatisfactory, we would then launch legal proceedings," Mr Phi said.
Slater & Gordon originally announced legal action would be brought on behalf of shareholders who had acquired Nufarm shares between March 2 and July 14.
In March, Nufarm took on Sumitomo as a 20 per cent shareholder at $14 per share and paid down $250 million in debt through an equity capital raising.
In July, it announced a significant blowout in its debt forecast, which exploded to $620 million on September 1.
"We were first approached by concerned shareholders after Nufarm halved its forecast operating profit and increased its forecast net debt from $350 million to $450 million on July 14," Mr Phi said.
"With Nufarm's financial year ending a fortnight later we started our investigations without any expectation the company would have further surprises in store," he said.
"However, on September 1 not only was this much higher than previous estimates, it also placed Nufarm in breach of a banking covenant.
"This disclosure was followed by another major fall in Nufarm's share price and required us to expand the scope of our investigations."
The class action against Nufarm is being funded by Comprehensive Legal Funding LLC.
A spokesman for Nufarm said the company had complied with its legal obligations with respect to disclosure.
"We have not received any direct communication from plaintiff law firms in respect of the speculated class action," he said
NUF Price at posting:
$4.84 Sentiment: None Disclosure: Held
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