So what has Mr Lai been up to of late?
It turns out that being the controlling shareholder of Hong Kong listed 'China Pipe Group Limited', he has just renewed a $US10m loan from that company.
https://www1.hkexnews.hk/listedco/li...2042201592.pdf,
until 31st July 2025. This, plus the capital return on disposal of the seed business, should have strengthened the Lai/Agria finances to the point where he is under no pressure to sell that Agria PGW stake. But the 5.5% interest rate he has agreed to pay is above 'bank rates' in Hong Kong.
Security for the loan is 20% of the shares in Agria Asia Investments Limited (AAIL) (p5 of above reference).
"AAIL is indirectly holding a share equity investment in an agricultural enterprise in New Zealand (which is PGW) through Agria (Singapore) Pte. Ltd. (“Agria Singapore”), the only and wholly-owned direct subsidiary of AAIL."
"According to (i) the latest consolidated management account of Agria Singapore for the nine months period ended 31 March 2022 and (ii) the latest unaudited consolidated financial statement of AAIL for the nine months period ended 31 March 2022 provided by AAIL:-
(a) the net assets value of Agria Singapore as at 31 March 2022 is NZD66.1 million (equivalent to approximately US$45.6 million);
(b) the net assets value of AAIL as at 31 March 2022 is approximately US$172.5 million."
The PGW share price closed at $4.43 on 31-03-2022. With Agria Singapore declaring a shareholding of 33,463,399 shares, this shareholding was worth:
$NZ4.43 x 33,463,399 = $NZ148,242,857.
Yet we are told the net asset value of Agria Singapore, which I believe holds PGW shares as their only substantial asset, is only $NZ66.1m. If my maths is right, this indicates a substantial quantum of borrowed funds on the Agria Singapore balance sheet: $NZ148.2m - $NZ66.1m = $NZ82.1m.
Of course over the last twelve months, PGW has paid a substantial dividend to Agria Singapore:
33,463,399x($0.14+$0.16) = $10.0m
That would be cashflow neutral or better to Agria Singapore, provided borrowing interest rates were less than: $10.0m/$82.1m = 12.2%. Since interest rates for borrowing by Mr. Lai Guanglin are well under that figure,
it looks like dividends from PGW would have to halve before Mr. Lai Guanglin would come anywhere near any financial strain