Hastie Group – The writing was on the wall

In today’s Australian Financial Review, Hastie Group Limited (ASX: HST) director Harry Boon blames three of the company’s seven banks yesterday for refusing to take a write-down on their debt s th reason for the collapse of Hastie Group. ┬áHe said that directors had tried hard to budge the banks, after the company had found two willing financiers, but according to Mr Boon, the banks were acting unreasonably.

Well, I beg to differ. The collapse of Hastie Group and the loss of 2,000 jobs had nothing to do with how the banks acted. Hastie Group was an ordinary business, with low profit margins, poor returns on equity, and constant capital raisings and new debt financing, it was always going to struggle. Directors are the ones to blame for the collapse of the company. If they had concentrated on making the business profitable, and not gone on a spending spree, acquiring companies at ridiculously high prices, Hastie may have survived. Read more of this post

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