Rural services company PGG Wrightson appears to be so concerned about bad publicity in recent days that yesterday it issued a clarification to business and rural editors throughout New Zealand.
Chairman Keith Smith said he hoped the letter would provide a basis for "informed comment" that avoided errors and misinterpretations such as those appearing in media in recent days.
None of the issues raised by Mr Smith have been included in Otago Daily Times reports since the company announced its June 30 annual profit.
The company reported an operating profit after tax of $30 million (down 8.8% on the previous corresponding period), but after allowing for non-trading items, that profit turned into a $66 million loss.
Part of the non-trading items was the settlement with Silver Fern Farms for the failed partnership bid.
Mr Smith said there had been widespread focus on the capital position of the company given the renegotiation of its banking facilities and the agreement to repay $200 million by March 31.
"Our concern is that this has given rise to extensive comment that is speculative, uninformed and often wildly inaccurate. These comments have been made without any discussions or requests for clarification from the company."
PGG Wrightson was not offering to sell businesses that formed part of its operating core, he said.
The company had not breached its banking covenants.
Lenders were notified in advance of a potential breach and waivers were received.
The company's lending syndicate remained strongly supportive, with a revised term debt facility in place to August 31, 2012 - extended by 11 months under the new arrangements.
"We believe our lenders' support is based on their recognition of the underlying strength of the company as evidenced by strong operating performance in the face of a difficult environment."
PGG Wrightson did not breach its disclosure requirements by delaying the announcement of the new banking arrangements, Mr Smith said.
Those were announced on the day they were finalised.
"There is no basis whatsoever for concern among the approximately 90,000 farmers who deal with the company. This suggestion was the most damaging of all the comments made over the past few days."
While the focus on the company's capital position was understandable, it should not be interpreted beyond the facts, he said.
PGG Wrightson had agreed to repay debt and that is what it would do.
It would involved a combination of cash flow improvements from operating activities, non-core asset sales and potentially new equity.
Speculation in the ODT is that the fall in PGG Wrightson's share price makes it a potential takeover target for cashed-up companies, such as Australian-listed Elders, or private equity funds.
The shares were trading yesterday at 73c.
Yesterday, the 52-week high was $2.80 and the low remained at 59c.
Brokers have generally downgraded the company's profit forecasts.
