National law firm Slater and Gordon has expanded the claim period in its shareholder class action against Nufarm Limited following the company's disclosure of higher than forecast net debt on 1 September 2010.
Practice Group Leader Ben Phi said Slater and Gordon had originally announced that legal action would be brought on behalf of shareholders who had acquired Nufarm Limited shares between 2 March 2010 and 14 July 2010.
The firm today announced the claim period being covered by the class action was being extended until 1 September 2010.
“We were first approached by concerned shareholders after Nufarm halved its forecast operating profit and increased its forecast net debt from $350 million to $450 million on 14 July 2010,” Mr Phi said.
“With Nufarm’s financial year ending a fortnight later (on 31 July 2010), we commenced our investigations without any expectation that the company would have further surprises in store.
“However, on 1 September 2010, Nufarm announced that it expected that its net debt at year end would be $620 million. Not only was this much higher than previous estimates, it also placed Nufarm in breach of a banking covenant,” Mr Phi said. “The disclosure was followed by a further material fall in Nufarm’s share price and required us to expand the scope of our investigations.
“In our opinion there is a reasonable basis to allege that Nufarm breached its continuous disclosure obligations by failing to disclose that its net debt was likely to be materially higher than $350 million prior to 14 July 2010. Further, it will be alleged that Nufarm engaged in misleading conduct by forecasting net debt of $450 million on 14 July 2010, when it ought to have been aware that the actual figure would be significantly higher.”
Mr Phi said Slater and Gordon had been retained by a significant number of institutional investors, but that the number of retail investors was under-represented in the proposed claim.
Slater and Gordon has set up a website portal to make it easier for investors to participate in the class action. It is the first time the firm has provided an online portal for potential class action clients to register their interest and receive a no-obligation assessment of their eligibility.
Shareholders are encouraged to register by 28 October 2010.
“We are in the advanced stages of preparing our class action,” Mr Phi said. “Accordingly, we are asking shareholders to register their interest as soon as possible.”
The class action against Nufarm Limited is being funded by Comprehensive Legal Funding LLC.