CHS Case Study
Cenex Harvest States (CHS) is one of the nation�s leading integrated agricultural companies. Headquartered in Minneapolis, CHS is a cooperative by structure and is owned by farmers and ranchers in the western US. They buy commodities from and provide services to their Coop members as well as other customers in the region. CHS divides their operations into five segments: Agronomy, Energy, Country Operations, Grain Marketing, and Processed Grains and Foods. For the fiscal year ended August 31, 2002, CHS had total revenues of $7.8 billion.
CHS desired a mechanism whereby the Company could use the perpetual preferred security to redeem patron�s equities. This accomplished several goals, including preserving cash for growth initiatives, providing liquidity for members in the form of a freely tradable security and providing an instrument with which to pursue various corporate financing objectives.