PGW - PGG Wrightson

[Hoop]

the sell order( if it was partially filled) could have been from a week ago @ 41,42,43 wherer ever . Then at what ever time it has transacted today they have moved the order down to .39 to transact.

There are perhaps other reasons but your suggestion, Stoploss, is what I was thinking has happened...

Also...I can't see that there wouldve been any residual from the day before as all the sales were at 40c and there are still 4 sellers at 40c. So how does it drop to 39 on a volume of 100? Enlighten me!

The plausable scenario could be that this investor had nearly sold out as (or before) the price started dropping and got most of their order away e.g at 41c**...when the share dropped the residual amount left (100) became hung....Brokerage firms (I think its NZX policy) have a policy that selling shares orders last a duration of one month.
Why not sell at 40C?....There are 4 other sellers at 40c so that 100 residual would be placed 5th in the queue and may not sell on the day of expiry.......

**...Using Sherlock Holmes logic the seller must have had a sell order at 41c because the 1 month chart shows the share price at or below 40c since the sell order was placed...If it was at 40c the seller would mostly likely be at the top of the queue..

Extra unforeseen expiry forced sell cost ...$2 !!!

If the investor was Scrooge McDuck and wouldn't part with the extra $2 loss..The sell contract expires and the investor is left with an unmarketable parcel of 100 shares

Minimum Holdings at any time shall, unless otherwise determined by NZX, are as follows:

(a) In relation to equity securities (shares), a holding with a market price at the relevant time of:

Number of Units	Price (both figures inclusive)
2,000	Where the price does not exceed 25 cents
1,000	Where the price exceeds 25 cents but does not exceed 50 cents
500	Where the price exceeds 50 cents but does not exceed $1.00
200	Where the price exceeds $1.00 but does not exceed $2.00
100	Where the price exceeds $2.00 but does not exceed $5.00
50	Where the price exceeds $5.00 but does not exceed $10.00
25	Where the price exceeds $10.00

ref : .. DirectBroking

[Snoopy]

I am pleased to find myself in constant agreement with you Snoopy these last couple of days. It is important to remember that Alan the Liar and Agria are distractions though to our ownership of PGG Wrightson shares. It is fine to ridicule Agria's position, or point out the flaws, but its not actually the company we are really interested in.

Sparky, despite what you may think I take no pleasure in watching the problems of Alan Lai unfold. As a PGW minority shareholder, it is in my best interests to see Agria/ Alan Lai (they are effectively one and the same) do well. PGW is a well respected seed producer and I would like nothing better than to see them break into the Chinese market. If Alan Lai can help them do this then I am all for him.

The problem as I see it is that Alan Lai chose PGW, but PGW did not choose Alan Lai. When I look at the business record of Alan Lai in agriculture all I see is a record of overpaying and underdelivering. I must be careful here, as I understand China is not the easiest place to do business, and we have to give Lai his chance to work his magic. My problem is I have yet to see even any green shoots, not even a single blade of grass from Agria. Has Alan Lai ever made any money in China? Is he really the partner that PGW should have in that market?

Agria's problems, should they get worse, would ultimately see ANZ and other banks take the PGW shares back and put them up for placement.

Actually the ANZ is supporting 80.81% unlisted subsidiary Agria Asia (otherwise minority owned by New Hope and Ngai Tahu) . If Agria, the US listed entity, went into chapter 11 then it is the US banks that would be calling the shareholding shots, not the ANZ. It would be fascinating to be a fly on the wall at these US banking facility negotiations, going on in the Agria boardroom right now.

It would be a short term hiccup, rather than something affecting the supply of goodies to the agricultural sector. The underlying PGW company is in my opinion a fine company, focused on basics, poised to improve considerably on last years earnings, is paying back debt, and now paying a dividend again.

Certainly the expiry of the $20m 'amortizing facility' in July 2013 will be positive for future PGW earnings going forward, thanks to the associated lower interest bill resulting. I believe that PGW will be stretched to pay a final dividend on top of paying back the amortizing facility though.

My concern is the future of Agritech, which is the real intellectual property jewel that Master, amongst others, does not want we minority PGW shareholders to sell off too cheaply. The poor performance of this unit is IMO largely the responsibility of PGWs own management. Yes there have been adverse weather events. But anyone who knows anything about agriculture should plan for such contingencies. I am afraid the only people who you can blame for Agrtech's underperformance are PGWs own staff, principally the departing Mr Carden.

Agritech is now vulnerable to a low ball Agria merger offer priced at the bottom of the Agritech business cycle. This I believe would be a terrible loss of value for minority PGW shareholders, should such a merger come to pass. Any closer Agria PGW tie up at this stage should IMO be strongly resisted. But with Agria as controlling shareholder at PGW, can we minority shareholders do anything about it?

SNOOPY

[Snoopy]

I can see a smaller dividend being declared for 2H2013. No more than a cent a share. Maybe 0.8c to take PGW to a total of 3c for the year, a nice round number. I'd be fine with that.

I wanted to spend a bit of time on this question since IMO it will be a major driver on where PGW goes forward from here share price wise.

What is not in question is that come July 2013 a $20m amortizing facility from the ANZ and Westpac is set to expire. I had assumed this meant PGW would need to ring fence $20m in cash to deal with this. However, if I look at the HY2013 report, note 8, I see that as at 31st December 2012 this facility was undrawn (yay, means it doesn't have to be repaid so the cash will be available for dividends). However it also says the facility is 'entirely committed to a contingent liability'. What does that mean?

This 'contingent liability' turns out to be the financial guarantee offered to Heartland when when PGW Finance was disposed of. Now IIRC, and I am interested here if Heartland shareholders can comment, Heartland are already maxed out on their own bad debt provisions. This I presume means that, on balance, Heartland management assumes they will be cashing in their PGW guarantee. In that sense the $20m is gone and is a real liability for PGW. However a provision is not actually a loss until the loan does go bad. If some of these provisions are recovered the guarantee of PGW could conceivably be part written back.

So my question is come 20th June can PGW simply wipe their amortising facility (because it is undrawn), or will they be caught out by that $20m Heartland guarantee liability?

SNOOPY

[Snoopy]

Are you sure about that? Surely ANZ would be operative in the USA for the purposes of any Chapter 11 declaration, should that happen?

Sparky it is not entirely clear in the Agria end of year 20F filing report because all of the PGW loans are consolidated within Agria's own loans.

Among the loans listed on p16 of the 20F filing where 'Liquidity and Capital Resources' are detailed are:

"Acquisition debt denominated in New Zealand dollars totaling NZ$63.0 million (RMB337.2 million, $52.2 million) that matures on October 31, 2012 with a mandatory repayment of NZ$27 million (RMB144.5 million, $22.4 million) on April 30, 2012 provided by a bank and Livestock Improvement Company."

This I believe is the consolidation of the Agria Asia debt, and includes the ANZ debt. The page then goes on to list all the PGW debt as well until finally we get

"· Loan facilities denominated in RMB of RMB62.0 million ($9.6 million) that matures on April 7, 2012 provided by one bank." (by implication a Chinese bank)
· Loan facilities denominated in US Dollars of US$57.2 million (RMB369.9 million) that mature between January 23, 2013 and April 19, 2013 (by implication a US bank)"

If Agria USA goes into Chapter 11, I believe it would be the banks that manage Agria's own debt that would drive the receivership. That does not include ANZ. However if Agria Asia went down as well, then obviously ANZ would be involved. Whether ANZ is involved or not would depend on which way the cards fell down IMO.

SNOOPY

[Snoopy]

The simple fact is farm gate commodity prices are just fine where they are now but any shift upwards in the kiwi $ comes straight out of the farmers pocket.

kiwi $ at 85-87 to the US $ is a game changer for farmers.

You wrote this on 2nd November 2012 Snapiti. Now five months later the exchange rate has moved into your 'game changer' range, and you have probably had a drought as well. Care to give us an update from down on the farm?

SNOOPY

[Master98]

I hold PGG and bought some more today. I believe it has good long term value at these levels, only negative is not knowing what Mr Lai's intentions are. He is the majority shareholder and the last dividend payment show's he is having an influence on company policy.
I hope PGG is not going to be his cash cow.

More debt needs to be paid before helping Mr Lai and his Agria problems out.

Mr Lai is a majority shareholder, he do has more hope PGW going well than you, so I don't think you need to worry about this. the way of asian running a company is much different from nz.

[Snoopy]

yep farming sux at the moment.
a 17.5 kg lamb is worth $75 if you can finish it, most farmers dont have the quality of grass to do this so the reality is most farmers are sitting on unfinished lambs hovering around 13kg dead wieght which is worth $50.
those finished lambs 12 months ago were worth $140 and unfinished $100.
Your local beef weaner sale are well under way with the average price being $480 which is almost $200 less per head than last year.
Your price per kg for beef animals to the works is down 30% on this time last year, but wait there is more, most regions are still in a drought this is half way through Autumn which means that most farms have not received half of there winter feed.
I know many farmers have bought in feed for winter that have never needed to do it before.
That is thousands of dollars worth and in some case's 10's of thousands.
Did you see on the news tonight a -5 degree frost on top of drought ground(truely a nightmare for any farmer)

Then there is the value of the dollar to consider, that will give the meat companies all the excuse they need to keep farm gate prices low.

All in all a dreadful year with an exceptionally long winter to come.

Snapiti, I appreciate the candidness of your reply. It wasn't the message we PGW shareholders wanted to hear, but it was the message we had to hear.

Spoke to a federated farmers rep a month ago. They said that while attending the Palmy livestock auction, some of the lambs were going through at the equivalent of $1 per kilo! That is what happens when there is no feed available. At that point there was feed in the South Island. But the freight cost in getting it north combined with the low lamb prices made interisland food trade uneconomic. Sounds like the farmers in your area are some of the 'lucky' ones!

SNOOPY

[Snoopy]

Don't get too depressed Snoopy. Livestock is not a major part of the revenue at PGW. It is an important part, but not a major part.

From a PGW perspective you are right Sparky. From a sheep / beef farmer perspective, livestock is the end product , your income at the end of the season. Less cash in the farmers pocket means less cash to trickle down to all divisions of PGW!

SNOOPY

[winner69]

SNOOPY - don't get too despondent over these 'attacks' on and 'jibes' at you

You have in the past withstood far tougher opposition than those current with an anti view to you - the current lot are only boys compared to what you have faced in the past

And what they don't appreciate that eventually (and invariably) you turn out to be right

Keep at it - cheers from your old mate winner

[percy]

SNOOPY - don't get too despondent over these 'attacks' on and 'jibes' at you

You have in the past withstood far tougher opposition than those current with an anti view to you - the current lot are only boys compared to what you have faced in the past

And what they don't appreciate that eventually (and invariably) you turn out to be right

Keep at it - cheers from your old mate winner

Mates together.!!!!!!
You deserve each other.!!!!
Read Farmer Hamilton's post on Synlait Farms Limited [SNLF] thread on Unlisted Market;
"A bit depressing when a company that sells greasy fried chicken,crap coffee,and nat pizza with their packaging littering the streests of NZ."
I believe you both hold shares in that company,whose growth is going to be [suspect] burgers.Don't you two have any morals?