While Nufarm management understatedly spoke of an ''amendment'' being required to just one covenant following this week's profit downgrade, the credit analysts are less sanguine. It seems Nufarm's lenders are now key stakeholders at the underperforming agricultural chemicals business.

The ratings agency lost no time in cutting Nufarm's corporate credit rating to junk. Along with the BB rating came observation of ''a structural change in the global glyphosate market, which faces conditions of oversupply and intense price competition that we believe are likely to persist over the medium term''.

As a result, S&P considers the company faces a ''significant refinancing challenge as the group rolls over its seasonal debt facilities''.

With management credibility running on empty, Nufarm would be hard pushed to tap institutional equity markets if the banks prove troublesome.

This could leave the company looking to the major shareholder Sumitomo Chemical, hoping that its interest in the business hasn't cooled as market conditions worsen. Sumitomo played Santa Claus to Nufarm shareholders when it bought 20 per cent of the company at $14 a share this year but, with the stock trading yesterday at $3.75, its next purchase is set to be at a materially lower level.

It's inevitable that talk of takeover interest in Nufarm will emerge in coming days with shares trading at historic lows.

On that front, it's notable that Sumitomo has made a commitment not to use its 20 per cent shareholding as a blocking stake if a third party offer for the company emerges. However, in a further twist, that obligation doesn't kick in until early next year, 12 months after the Japanese conglomerate's original investment in Nufarm.