The Nufarm Ltd (ASX: NUF) share price has crashed to a more than three-month low this morning. It comes after the company's largest shareholder decided to dump its shares.
The Nufarm share price is currently down 14.47% to $4.995, while the S&P/ASX 200 Index (ASX: XJO) is down 0.04%.
The agricultural chemicals group told the ASX it had received word that Sumitomo Chemical Co Ltd (TYO: 4005) will be selling its entire 15.9% holding in Nufarm.
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Nufarm share price sinks despite reassurances
The ASX group tried to reassure investors that its partnership with Sumitomo is still intact despite the sell-off.
Nufarm said:
Nufarm and Sumitomo plan to continue their mutually beneficial business alliance that started more than 12 years ago. The crop protection business is important to both companies and therefore the desire to continue to grow the commercial relationship and synergies in global agriculture markets remains a key objective.
Sumitomo licking its Nufarm wounds
No reason was given why Sumitomo was quitting the Nufarm share register. Perhaps the 20% jump in the Nufarm share price over the past year (before today's crash) enticed it to sell.
Mind you, not that Sumitomo is exiting with a profit. The Japanese group paid $14 a share for Nufarm back in late 2009, reported the Australian Financial Review.
It's believed that Sumitomo sold the Nufarm shares at $5.38 to crystallise the painful 60% loss.
The investment was meant to help Sumitomo negotiate strategic agreements to distribute chemicals globally.
But China foiled those plans when its manufacturers sent the glyphosate share price tanking by flooding the market with the chemical.
Nufarm share price could find redemption
The block sale comes after Nufarm reported a 41% increase in first-half underlying earnings before, interest, tax, depreciation and amortisation (EBITDA) to $330 million.
However, the Nufarm share price slumped on the earnings news, even though most brokers were impressed by the results.
Strong soft commodity prices and a good crop outlook should be bolstering the fortunes of ASX agri-businesses.
The Elders Ltd (ASX: ELD) share price is one example. That shot up strongly on its strong profit result yesterday.
Perhaps once the dust settles, the Nufarm share price can find supporters again.
