Bit more stuff.

http://www.stuff.co.nz/business/industries/2812515/South-Canterbury-Fina...

note two board members have been replaced think Nattrass is on the board of Fonterra

This today

http://www.stuff.co.nz/business/2811116/The-bell-tolls-at-PGW

Norgate has maintained a nearly 30 percent stake in PGG Wrightson with the assistance of the wealthy South Island McConnon family and through a company that borrows money directly from the public to fund the stake.

This company, Rural Portfolio Investments, would already be stressed by the fact it is not getting dividends from PGW - as this is how it meets the interest payments to the public.

So, unless Norgate can mysteriously find millions of dollars from somewhere there seems little chance he will be able to participate in the capital raising that PGW, for all the apparently casual way it has raised the subject as a possibility, is clearly going to need.

PGW has to repay its bankers $200 million by March. Unless it sells some chunky assets - and doing so would undermine the whole rationale of the business - it is to be imagined the company will need a capital raising of somewhere in the order of $150 million.

Based on current share prices it would be difficult to see any share offer being pitched at anything more than about 50 cents a share. This would mean issuing about 300 million new shares. The company has just 315.8 million at the moment.

and this

http://www.stuff.co.nz/business/industries/2812406/Pyne-Gould-Corp-post-...

Those south island dairy farms are starting to look bloody expensive,when/if Fonterra announce a reduced payout especially as the dollar is up 24% against the pound then its going to hit the fan and the Govt cheque book us going to be well used.

What's the betting that Fonterra will be the next in line for Government bailout money, after the finance companies of course.

Am I right in thinking the banks are loading their losses in bad loans onto the 'performing' loans and if so, isn't this more than a bit wrong!

Jack
Im leaning more towards self interest. They have lent record amounts on income levels that have not risen since the bubble began, yet dairy land and debts are up multiples in value. They now are looking at some serious losses and are hoping that like in 2001 when the dumped an extra 20 billion into NZ they can do the same and somehow weather the storm.
Banks only have their own interest at heart, if you borrow off them you are an asset and a source of income, lend to them you are a liability. Its a lovely thought, all those altruistic banks doing whats good for the average citizen, the reality is that it only happens when the respective parties interests line up. Many farmers are at present feeling the cold hand of capitalism on their shoulder c/o the local bank manager.

Agreed Andrew that its also in their own interest, but that's often been the case in the past as well (e.g. the earlier part of the 1990 recession) but they still went ahead and played the heavy hand....fortunately they now seem to be able to bide their time with their customers and work their way through it together...and personally I don't doubt that's genuine because I'm sure they don't like playing the bad boys, but equally there is no doubt that if they did not have longer-term confidence in the industry, the pressure on farmers to sell from their bankers would be far more acute than it is - I'm sure the banks shareholders, of which I'm one, would expect that.

Wally - there's probably quite a few farms the banks would welcome the Amish to come and buy, funding required or not