FBU management may have their faults, but do you really think they would accept an offer to fix them from someone who can't spell Fletchers? <sigh> these things do matter. Dreamer.
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Maybe they would offer Alistar Mid a job. They can't spell profit. They don't even know the meaning of the word.:t_up:
http://www.nzherald.co.nz/business/n...ectid=11995190
One view as to why FBU does not need to raise new capital.
There is a change in contract being alluded to here, from a contract with an assignment, to a contract with novation. In contract law, the assignment model is where a contract is drawn up between the client and the contractor (Fletcher's) and they complete the assignment. In this model, they claim to have lost hundreds of millions of dollars, and their CEO notes that level of risk is too large a burden to bear. They blame the cost of what has been designed for the assignment as too difficult to determine. For example, there has been a great deal of effort in building technology to streamline and make the process of building more efficient, which impacts on flexibility of design. Fletcher's have been an active player to develop that technology, that limits (out of concern for efficiency) the options for design. Such is the streamlining effect of the building process.
A novation contract takes care of that problem, but comes with deeper concerns. These types of contract are more common in Australia and the UK, but not New Zealand. Arrow International are an early adopter of this type of contract in New Zealand, and applied it throughout the Christchurch rebuild. It works by transferring the obligation under the old contract with another obligation, either an extra one, or a replacement. What happens in effect is that a contract between the client and Fletcher's is drawn up (by Arrow Int) and then it is "designed" or worked out as it unfolds. Project managers such as Arrow Intl take a more prominent role in making design decisions. Decisions before the contract, that sets up the conditions for the building process to unfold, are set aside. True, with an assignment contract, you can simply agree to change the terms. But in complicated building processes, those luxuries are difficult to identify. What is being contested is that building processes are better at design than designers. Architects for instance are to compete alongside other sub-contractors to play their part in the process. Should their design decisions not fit with the efficiency of building technology, their decisions are set aside.
Novation is commonly used in futures and options markets, especially with OTC derivatives. In summary, what was a mechanism for more freedom between parties is in effect a reduction of thought. This is a return to classic neoliberalism, which is still being worked out in New Zealand.
I do hold some FBU. It is likely to take a few years at least to sort their mess out, so is it a sell at today' price or I am selling at the bottom?
I have sold mine. a while ago. Will consider repurchasing at $5.50 or less. And maybe not even then. Personally I would let them go. But I am probably wrong as I thought the sky was falling on retail and do not own Briscoes or Hallinsteins. (or the Warehouse)
Good luck.
Cheers
RTM