Fisher & Paykel

The Herald reports:

Prime Minister John Key has not ruled out assisting New Zealand whiteware maker Fisher & Paykel Appliances, which has announced plans to find a cornerstone investor to help dig it out of a mountain of debt. …

Yesterday, Mr Key said he had phoned chief executive John Bongard to discuss the company’s situation and while Bongard had not asked for support, Key said he would keep in touch.

“They are an iconic New Zealand company, employing 1600 people. I’ve made it clear I’ll be staying in contact.”

Key said the Government did not want to become a primary banker, but it was not ruling out the option of helping Fisher & Paykel.

“Governments around the world have taken that course and we reserve the right to do so.”

Governments around the world have invaded Italy also, but that doesn’t mean we should.

No problems with the Govt making it easier for F&P to get an investor. I wish the Govt would make it easier for all companies to get investors.

But if the Government starts picking particular companies to “bail out” or leand money to, then they’ll find the queue for such assistance will get very long. Plus the moral hazard of having an implicit Government guarantee will make it more likely those companies will make bad decisions.