Almost no interest payments and principal payments were to be made on this debt for 5 years. They wanted to keep them operating in Canada because they provided a lot of jobs to Canada and because it was politically convenient because an election was about to take place. The 600 series was one of the first tractors to offer the user an option to control where the hydraulic fluid should be pumped. Provides information on the firm's claimants in order to focus students on the issues of a refinancing. Aggressive debts in good times are not a good financial strategy, organization should create a balance between capital structures and bring in equity financing when in good time. The firm has to cut back production and cut marketing expenses. In the mid-1980s, the short-lived 600 series was released.
Ferguson Background After the end of Reconstruction in 1877 Southern state legislatures enacted Jim Crow laws to legally segregate the races. What were the consequences for Massey? Brands: Fosters, Grolsch, Miller Brewing Company, Peroni Nastro Azzurro, Pilsner Urquell… Global Presence: It has operations in 75 countries across Africa, Asia, Australia, Europe, North America and South… 1644 Words 7 Pages Massey Ferguson Case Advanced Corporate Finance The Company Massey Ferguson is a multinational producer of farm machinery, industrial machinery and diesel engines. They later sold their interest, and Dromson now owns Eicher which now builds specialized tractors for vineyards and such. ChotuKool falls in to the business of refrigeration, to understand the business better let us understand the overall refrigeration business But before that lets looks at the consumer durable market, the consumer durable market consists of products from watches to fans. Where possible, compare Massey's strategy with those of its leading competitors. In 1981, Massey, after length negotiations, exchanged short-term and medium term debt for long-term debt and preferred stock.
The Toronto manufacturing complex has since been demolished, leaving only its head office building. Massey also experimented with tandem. However when backing the second order he simultaneously cools and then packs the cookies from the first order. When the economic recession of 1980 depressed markets and reduced demand for farm machinery to depression levels, Massey- Ferguson found itself in the financially distressed condition it was in and unable to compete with its major rivals in the industry. While this might have been justified by the growth strategy, it turned.
Do you approve of their debt policy? What was more unusual was the fact that it used short-term debt to finance its business operations, fixed asset capital maintenance, and long-term principal and interest repayments. What options are available for alleviating Massey's financial problems? Company will pay them interest with betterment in finance positions. Massey continued to lose money over the next 3 years and had subsequent refinancings in 1983 and 1986. Currently in production at the Jackson facility are the recently released 7700 and 8700 series Massey Ferguson tractors. First, during its expansion in the 1970's, Massey levered itself immensely. Argus was considered by the financial community to be a potential source of equity capital for Massey, but they showed no interest in putting up a lot of money and holding 16% of the outstanding shares.
Despite its hardships, Massey Ferguson was selling 25% more tractors than its nearest competitors at this time. Black failed to obtain a suitable response, and resolved to cut his losses. They reported an unpredicted loss. I state and prove five propositions about platform systems, which stand in contrast to the propositions derived for step processes in Chapter 8. Question 1 Assess the product market strategy and financial strategy Massey pursued through 1976.
Through extensive advertising campaigns it became one of the most well known brands in Canada. The farm and industrial machinery has two product lines: the farm machinery line and industrial machinery line. The industrial machinery line consists mostly of several industrial tractors. In less developed countries like Pakistan, Peru, Egypt, Iran, Libya, Turkey, Saudi Arabia, Sri Lanka, Sudan and Mozambique Massey was quite successful in carrying out the contracts and operations. A labour shortage throughout the country also helped to make the firm's mechanized equipment very attractive.
In 1969, Massey Ferguson began producing a line of by the name ' Ski Whiz'. The board of directors assigned a new president to the company to restore the profitability. To begin with it made some of the world's first at first by assembling parts from the , but eventually designing and building its own equipment. Mano-Will consulting proposes that Massey- Ferguson implement a solution to its current condition in order to remain viable in the industry. The above-mentioned contractionary monetary policy pushed the American economy into recession.
It would be hard for. Specific problems: Debt level and structure Massey's financing choices over the years brought with them many problems, which aggravated the already grim situation in the product markets. Interest payments must be suspended and debt maturities extended. The case reviews Massey's performance and position in the industry and raises questions about the company's ability to compete in the long run. Work flow needs to be re-examined, and adjusted for efficiency.
Massey chose an aggressive financial policy and an aggressive risky product-market strategy. It was required to pay accumulated preferred dividends before Massey could issue new preferred shares. The production of tractors and other agricultural implements, during until 1999. Before 1976, Massey was successful because a it focussed on the future growth markets in its industry, b Massey had little or no competition in these markets, and c it diversified against political and other risks. The 25 horsepower was popular, and the expanding Prairie provinces clamoured for big breaking engines. Lenders were offered stock and warrants, so that they ended up owning 81 % of the firm.