Hey snoopy....re your msg about agri? If receivership does indeed eventuate...do we as shareholders have first option for agrias shares?
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Hey snoopy....re your msg about agri? If receivership does indeed eventuate...do we as shareholders have first option for agrias shares?
Receivership of Agria? The receiver of Agria would own the shares, and it would be up to them to sell them how they thought best.
The only way that existing shareholders might get in on the action is if PGW had loaned some money to Agria, or the receiver thinks the best way to get some money for the shares is to offer them to existing shareholders.
As I previously posted in post 1947 on this thread, quoted from the risk section of the Agria annual report
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"Furthermore, New Hope International has the right to sell its shares in Agria Asia (the takeover vehicle used to hold the PGG wrightson shares) to Agria Group Limited, or Agria Group, on the terms and conditions provided in the shareholders agreement at a certain repurchase price determined pursuant to a supplemental agreement entered into between Agria Group and New Hope International in June 2011. The obligation of Agria Group in connection with this put option held by New Hope International may be on terms that are not commercially favorable to us."
My reading of this is that New Hope have covered their backs and probably have an agreement with Agria to sell the New Hope share of "Agria Asia" back to Agria, most likely at the price they paid for it. That means that New Hope can bail out of Agria Asia at any time, and at any whiff of trouble. New Hope is a substantial organisation. But I think Agria have got them involved simply to add credibility to the takeover deal. Because the credibility of Agria itself is effectively non existent.
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If I was the MD of 'New Hope' I would pull my money out of Agria Asia at no cost (using the put option) let Agria go bankrupt then buy the 50.1% of PGW shares that Agria used to own at a receivers discount. Why would I do the alternative and put more capital into Agria Asia, effectively locking in my purchase price at 60c, when I could buy those same shares off the Agria receivers at a far lower price?
SNOOPY
The potential receivership of Agria is an educated guess on my behalf, based on the following:
1/ Agria is heavily indebted.
2/ Agria has no income, bar selling a few corn seeds in China. This represents about 5% of Agria business verses the 95% from their controlling shareholding in PGG Wrightson.
3/ Agria is facing a large writedown on their PGW shares come 30th June, the end of their business year.
On top of this NYSE listing rules requires a share price consistently above $1 (NYSE:GRO) or the offending share will be suspended from trading. The current share price for Agria is down to $1.01.
Draw your own conclusions. I have drawn mine.
SNOOPY
I see PGW dipped down to 29c yesterday although it has recovered to 30c today.
I have been doing some more homework on the potential problems that Agria faces in debt repayment. This involves looking at the SEC 20F filings which have taken the place of what we would call the annual report in New Zealand.
p22 shows principal and debt repayments of 575.8RMB, about $NZ115m, to be paid by 30th June 2012. But the bigger hurdle is 1245.5RMB (about $250m) due on 30th June 2013.
A significant loss of around $NZ150m will have to be booked to the Agria accounts on 30th June to take into account the decline in the PGW share price from about NZ50c to about NZ30c over the year.
On p15 we learn Agria has $550RMB or $NZ100m of cash resources acting as a guarantee for the bank loans. It does look as though this will be wiped out by 30th June 2012, leaving Argia in a difficult position. If they do pull a rabbit out of the hat this June then surely the June 2013 repayment schedule will finish them.
Note 24 shows total end of year equity as at 30th June 2011 of 1,613,451,000 RMB, or $NZ322m
But the banks won't let them go to that zero equity wire. I think Agria are probably already gone
SNOOPY
Agria now trading at 93c. Seems to have been under $1 since June 11th. The clock is ticking on suspension of trading of Agria shares on the NYSE!
From
http://www.ehow.com/about_6589961_ha...-_1-nyse_.html
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Stocks That Fall Below $1
Stocks listed on the NYSE have a number of strict rules and guidelines they must follow to protect shareholders and provide transparency and effective regulation. The principal rule is Section 802.01C of the Exchange's Listed Company Manual, which stipulates that the price of a stock must not fall below $1 for a consecutive 30-day trading period, nor should it have an average stock price closing below $2 in the same period. If this happens, the stock is considered non-compliant, and the company has six months to bring its share price and the average share price back above $1. If the company fails to do so or fails to acknowledge the fact, suspension and delisting procedures can take place.
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SNOOPY
If Agria gone then New Hope will grab the 50.1% pgw shares at a good bargain( maybe) and become a new real cornerstone shareholder, it is great for pgg wrightson.
When crafar farms going unconditional next month, pgw suppose to get about $30m( $25m in 2010) loan repayments from the receivership used to pay down debt or distribute to shareholders:)