Originally Posted by
Snoopy
1/ Underlying Agria short term debt: $NZ22.472m
2/ Underlying Agria long term debt: $NZ35.767m
The total income needed to service this extra debt at say 5% interest is:
0.05($22.472m + $35.767m) =$2.912m
The chinese standalone ventures contribute no profit for Agria the last time I looked. So all of this extra interest must be paid from any dividends received from Agrias 50% holding in PGW. Dividend paid by PGW over the last twelve months consist of a 1c dividend (September 2013) and a 2c dividend (April 2014)
Now from the annual PGW report, Agria holds 379,068,619 PGW shares.
A 3c annual dividend on those shares will provide:
0.03 x 379,068,619 = $NZ11.37m
So I take back what I said in the previous post. Agria should have enough free cashflow going forwards to cover their extra debt burden after all, assuming they are roughly cashflow neutral on the standalone Chinese operations.
But whether they were able to renegotiate their underlying Agria only debts at an interest rate of 5% (interest rates are very low in the US) , or whether New Hope has called in their dividend guarantee demanding cash from Agria and wrecking their cashflow is is all unknown and undisclosed. There is just not enough information released in the public domain to know what the true cash position of Agria is going forwards.
There are roughly 110.8m Agria shares on issue. So a PGW NPAT of say $35m less extra interest costs due to Agria of $3m gives $32m, of which the Agria 50% share is $NZ16m
$NZ16m/110.8m = NZ14.4c eps for Agria shareholders.
14.4 x 0.86 / 130 = 9.5% yield