Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Unwary Farmers To Receive Monopoly Money

By Farmers for a Better Dairy Deal

14 June 2001

Global Co:
Unwary Farmers To Receive Monopoly Money

“Global Co seems content to let dairy farmers believe its capital notes will be virtually cash”, said Mark Masters on behalf of Farmers for a Better Dairy Deal.

“That’s a real trap for the unwary .”

“Farmers who want to supply another processor or reduce production or sell their farm are likely to be ‘paid’ out by Global Co in capital notes.”

“But, like other monopoly money, capital notes have little intrinsic value—they have no principal payment date, the interest rate can be changed by Global Co and interest doesn’t even always have to be paid – Global Co can dish out more monopoly money instead of paying interest in cash.”

“Global Co can create as much monopoly money as it likes.”

“In bad times, capital notes will be the next worst thing to the surrendered shares.”

“And the value of Global Co’s capital notes will be set in the financial market.”

“Every farmer knows how markets react when things are over supplied or out of favour. Their value will drop.”

“But there’s no upside—the interest rate will see to that.”

“And, what’s more, dairy farmers will have to pay a broker to sell them!”

“In the real world, a company simply couldn’t decide to repay shares with a loan. Shareholders wouldn’t put up with such a goofy, flaky arrangement.”

“If a shareholder wants out, they expect to be allowed out.”

“But under Global Co, when a supplier wants out, they’re likely to become forced lenders to Global Co – still on the hook for Global Co’s cash problems.”

“For Global Co, the risk of suppliers leaving in droves, causing a ‘run’ on Global Co’s reserves, can be easily overcome using much more efficient and conventional arrangements – for example, allowing farmers to sell their shares to other supplying farmers.” [This was part of the 1999 Mega Co-op proposal].

“Global Co has such a weird capital structure. They even take 18 pages to summarise it!”

“And Global Co has even got its ‘peak notes’ wrong” (see our media release earlier today). It hardly gives you much confidence that the rest of Global Co is right”, said Mark Masters.

“Of course, we’ll find out more about the capital notes – and much more about Global Co – if and when Global Co puts out a proper prospectus for its ‘monopoly money’.”

“Sadly, we won’t get real information until well after our vote. Pity our leaders haven’t informed us more fully and more openly before we vote.”

“But then I wonder if our directors really understand it? Certainly, not many people I’ve spoken to do. Not even supposed financial gurus in Wellington”, concluded Mark Masters.

Inquiries to

Tony Baldwin
Tel (04) 386 4755 or (025) 386 4755

© Scoop Media

Business Headlines | Sci-Tech Headlines


ScoopPro: Helping The Education Sector Get More Out Of Scoop

The ScoopPro professional license includes a suite of useful information tools for professional users of Scoop including some specifically for those in the education sector to make your Scoop experience better. More>>

Big Tax Bill Due: Destiny Church Charities Deregistered

The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations. More>>

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>


Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>


Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>