Hi Good Peoples,
The following article, "The revival of Southcorp's balance sheet will require some tough management decisions" which is located at http://www.theage.com.au/articles/2003/09/02/1062403514931.html is worth reading.
The highlight paragraph is "At June 30 this year capital employed in the business included $861 million worth of wine at various stages of development, and $781 million in property, plant and equipment. Chief executive John Ballard needs to get those numbers sharply down to get Southcorp's return on capital sharply up."
Now if thats the case, then only way to do it is to sell fixed assets or reduce inventory. Ballard stated he will not speed up the premium wine maturation cycle but that doesn't stop them for messing around at the low end or releasing the premiums earlier.
My bet is there will be sales of some assets, office buildings and the other non essential unique assets.
And then as a cynic I also wonder if the value of the Rosemount Brand asset will be further downgraded as that will also help fix the problem.
One can only ponder the remarkable wisdom of the SC Rosemount take over / merger.