PGW - PGG Wrightson

[Snoopy]

The problem remains Belg that if the Agria shareholding of PGW is diluted below 50.01%, (such as in a capital raising where Agria's backers put in more money than Agria) then Agria will have to 'mark to market' 377m PGW shares in their accounts currently on the books at 60c to 30c (if that is the current market price). That means Agria will take a

($NZ0.6-$NZ0.3)x377m= $NZ113m

hit in their accounts.

Agria will not let their 'backers' out of their cage to allow this to happen.

When one uses the words' backers', the Chinese government backed 'New Hope' comes to mind. But how much help are they really willing to lend to Agria? As Chalkie pointed out, the New Hope shareholding has a guaranteed income agreement attached to it. And it also has a redemption clause that can be initiated at the behest of New Hope whatever the consequence to Agria. Despite being called a shareholding, this New Hope shareholding in Agria Asia has all the hallmarks of a loan. I would say that New Hope is a fair weather friend to Agria at best. If trouble strikes I expect New Hope to run for the exits.

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

SNOOPY

[Agrarinvestor]

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

SNOOPY

>>goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid.<<

Maybe i have understood your statement wrong. IMO Alain Lai has forced PGW to make write downs on goodwill, because these goodwill is very old, years before Agria has taken over the leadership of PGW. These writedowns were predictable since march 2013 when AGRIA has anounced his own write Offs (60 Million US$ Land use rights). I think it is a good idea to clean the books.

Please have a look at You Tube and open your ears at 4:30:
http://www.youtube.com/watch?v=irmrmWBYs8Y

[Snoopy]

>>goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid.<<

Maybe i have understood your statement wrong. IMO Alain Lai has forced PGW to make write downs on goodwill, because these goodwill is very old, years before Agria has taken over the leadership of PGW. These writedowns were predictable since march 2013 when AGRIA has anounced his own write Offs (60 Million US$ Land use rights). I think it is a good idea to clean the books.

Agrarinvestor, the goodwill on the PGW books certainly had value when Alan Lai bought into the company. His vision was for Agritech to become the Monsanto of the Southern Hemisphere. Unfortunately Agritech have fallen badly at the first hurdle, Australia, and their goodwill has gonre down with them. Make no mistake, Lai will not be pleased with Agritech. Can you imagine anyone paying 60c for PGW shares now? And it is the New Zealand auditors that have demanded the PGW goodwill writedown, not Lai. The auditors tagged the PGW accounts last year noting unrealistic assumptions by PGW management. I do agree that it is a good idea to clean the books. The problem for Lai is that with this latest clean out, the Agria book is reduced to a fancy looking cover with no pages at all inside! Still, you can't get cleaner than that I suppose.

SNOOPY

[winner69]

I've mentioned a few times that the PGW Pension Fund isn't in the best shape and the company didn't appear to be too worried about it. If I was a member, current or beneficiary, I would be feeling uncomfortable.

Chalkie on the case now
http://www.stuff.co.nz/business/opin...sion-practices


Fancy the fund investing so much n the company itself.

Spose all this was too hard for George and John to sort out. All I can say is the trustees must be in the company's back pocket

[percy]

Do not think George will be too concerned.Being on contract most probably looking after his own pension.
Now left to Sir John and Mark.
My own view is a pension fund should not have any funds invested in their own company.

[iceman]

Thanks for posting the link W69. I hadn't seen it. This is a seriously bad look and good on Chalkie for discussing it. agree with Percy that the pension fund should not invest in PGW at all and having Cushing on the PGW Board, Trustee on the pension fund and a shareholder in the investment firm handling the scheme's funds is a serious breach of ethics

[Snoopy]

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

Agria result out. A huge loss as expected. Maybe not all shareholders expected it though. The GRO share price fell nearly 8% from $1.16 to $1.07. The 20F filing was not released as yet, so it is hard to get a handle on the behind the scenes machinations. My initial calculations showed the result to be a little better than I expected. But I feel we will need to wait for the more detailed accounts to pass judgement. I am still willing to buy a package of PGW shares off Lai should they pop out at a discount.

SNOOPY

[winner69]

Does the irrigation part of PGW get to cash in with all those broken systems in the wind this week?

[percy]

Does the irrigation part of PGW get to cash in with all those broken systems in the wind this week?

They most certainly will.

[winner69]

They most certainly will.

So millions more unexpected/unplanned profit eh .... time for an rerating then to allow for this

Hope was a strategy then ...though no one really hoped for the damage done in the first place

Will it affect farming overall? Farmers are really resilient so probably not