Nufarm off credit watch

By Phil Boeyen, ShareChat Business News Editor

Wednesday 10th January 2001

Ratings agency Standard & Poor's has removed listed chemicals company Nufarm (NZSE: NUF) from CreditWatch after the expiry of a takeover bid.

Nufarm originally went to the market for Australian agri-business company IAMA in November last year, offering A$1.30 for the rest of the shares above the 20% it already owned.

The company later said its bid had been motivated by a desire to see progress on the restructuring of the IAMA business and that the subsequent IAMA-Dalgety merger proposal could achieve those objectives.

Standard and Poor's says its current ratings on Nufarm reflect the company's "moderately aggressive financial risk profile and solid position in selected crop protection and industrial chemical product markets in Australasia and overseas."

"Nufarm is a dynamic growth-oriented company. Acquisitions in the US and Europe over recent years have provided a more geographically diversified revenue stream, providing Nufarm with future expansion opportunities. These acquisitions, along with the sale of the fertilizer interests, also have changed the company's business mix."

The ratings agency says the outlook for Nufarm is stable, but notes the company's ability to successfully manage business units in Europe and North America will be a critical factor to watch.

"The global market is expected to remain highly competitive despite continuing rationalization of global chemical companies."

"Significant growth in earnings over the past five years, in part, reflects the high level of acquisitions. The chemicals industry typically is characterized by cyclical earnings."

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