Massey Ferguson started the fiscal year 1981 in nonpayment on $2.5 billion of unsettled debt. The firm’s future pivots on the capability of financiers , the states of Canada and Ontario, and the managerial team, to settle on a funding program. The case oversees Massey's standing and position in the industry and leads to questions regarding the firm’s capacity to stay in business in the future. Gives information pertaining to the company’s applicants so as to get the students to focus on the challenges related torefinancing.
Proforma Balance Sheet (US.$ millions)Year Ended October 31, 1981 - 1985
Proforma Income Statement (US.$ millions) Year Ended October 31, 1981 - 1985
Analysis of Sales
Compound Growth Rate
New Shares Issue
New Preferred Shares Issue
Total no of preferred Shares
Dividend per year
1. Assess the product- market and financial strategy Massey pursued throughout 1976.How does Massey differ from its competitors?
2. As a financial advisor to Massey's management, what refinancing plan would youpropose? Be specific - Hint: Use Proforma financial statements to make sure yourproposed plan is viable.
3. How does the plan affect various interested parties: shareholders, lenders, employees,governments and management?
4. Why, fundamentally, did Massey get into financial trouble?