PGW - PGG Wrightson

[Snoopy]

The last 5.5m shares i think vultures will be quite happy to pay at "lowball offer" 35cps , or even 37cps after they got 40m at 29cps and 7.5m at 32cps.

Hard to see a third party making a bid for PGW when Agria already has control. Furthermore Agria could not buy all of those PGC shares without making another bid (5% max under the provisions of the takeover code). I think it is likely the PGC shares have been scattered among institutions who won't be bidding. And Agria itself has no reason to bid or even access to funds to support a new bid, from my reading of the Agria balance sheet.

SNOOPY

[kiwi_on_OE]

PGW is a subsidiary of Agria, so PGW's debt should be consolidated into Agria's balance sheet.

[Agrarinvestor]

In terms of your questions on, PGG Wrightson, Agria consolidates PGG Wrightson's results and then backs out the non-controlling portion. A declining share price does not impact such treatment on the income statement nor would it on the balance sheet. It would impact the valuation if there was some type of liquidity event. It would also impact the share valuation of Agria as investors tend to look for arbitrage opportunities buying shares of Agria if the underlying PGG asset is worth more than the implied value of shares of Agria. The investment by Agria and partnership with PGG has been and remains mutually beneficial, positive and productive. As the markets improve, we are confident the company will be more properly valued.

thats what IR told me a few month ago

[Snoopy]

In terms of your questions on, PGG Wrightson, Agria consolidates PGG Wrightson's results and then backs out the non-controlling portion.

Right. So if Agria owns 50.22% of PGW, then 50.22% of PGW debt will be consolidated into the Agria accounts. (that agrees with what you said kiwi_on_oe.) Of course this has only happened because Agria now controls PGW. When Agria owned only less than 20% of PGW, then the PGW debt was not consolidated.

A declining share price does not impact such treatment on the income statement nor would it on the balance sheet. It would impact the valuation if there was some type of liquidity event. It would also impact the share valuation of Agria as investors tend to look for arbitrage opportunities buying shares of Agria if the underlying PGW asset is worth more than the implied value of shares of Agria.

This doesn't quite ring true to me. While the market value of PGW shares does not affect Agria cashflows, I believe there is a requirement to 'mark to market' any controlled entities that Agria invests in at year end balance date. If Agria was an NZX listed company that would certainly be the case.

Also given the low turnover in Agria shares (today 24,000 Agria shares changed hands at 90c), I find it scarcely credible than any serious arbitrage is taking place

The investment by Agria and partnership with PGG has been and remains mutually beneficial, positive and productive. As the markets improve, we are confident the company will be more properly valued.

thats what IR told me a few month ago

Well investor relations would say that wouldn't they? But if the PGW share price goes down and stays down (as it has), this will surely have serious consequences for Agria whne the time comes to roll over Agria's own debt (January 2013). Of course there is a very real possibility that Agria will be delisted from the NYSE by then, due to the Agria share price being persistently under $1.

SNOOPY

[Agrarinvestor]

>>I believe there is a requirement to 'mark to market' any controlled entities that Agria invests in at year end balance date.<<
That were exactly my concerns, that were my questions:

i am a small shareholder of PGW in Germany and own currently 18000 shares. I have a question about the impact of the decreased shareprice of PGW for Agrias accounting. As far as i know Agria, purchased the 50.01 stake in PGW for round about 60 cent and today we are a facing a shareprice of 33 cent. Can these decline in shareprice be responsible for a potential bancrupty of AGRIA ? What kind of impact has these decrease for the balance sheet and the earnings of Agria ? How has Agria benefit from the investment in PGW ?

The answer:

In terms of your questions on, PGG Wrightson, Agria consolidates PGG Wrightson's results and then backs out the non-controlling portion. A declining share price does not impact such treatment on the income statement nor would it on the balance sheet. It would impact the valuation if there was some type of liquidity event. It would also impact the share valuation of Agria as investors tend to look for arbitrage opportunities buying shares of Agria if the underlying PGG asset is worth more than the implied value of shares of Agria. The investment by Agria and partnership with PGG has been and remains mutually beneficial, positive and productive. As the markets improve, we are confident the company will be more properly valued.


I have some experience with a company in the year 2000 were emprise was a mayor shareholder of mediascape and it was exact like IR response to my email.
But if you are sure, it would be nice to hear more from you about this point. Currently i am waiting for the earnings release of PGW and then i decide to buy more
or to be more patient.
Agria has 50% insiders as investors and 20% mutual funds. I am sure that they are knowing why they purchased PGW.

What is the earnings release date of PGW ?

[Snoopy]

What is the earnings release date of PGW ?

Not yet announced for 2012 but my guess (based on previous years) is any time forward from the third week in August 2012

SNOOPY

[Snoopy]

The answer:

In terms of your questions on, PGG Wrightson, Agria consolidates PGG Wrightson's results and then backs out the non-controlling portion. A declining share price does not impact such treatment on the income statement nor would it on the balance sheet. It would impact the valuation if there was some type of liquidity event.

The resetting of Agria loans starting from early 2013 surely is just such a liquidity event.

Whether this is a problem for Agria will depend on how friendly they are with their bankers. Interest rates in the US are certainly low. Maybe the Chinese government will provide a low interest loan to Agria in recognition of the strategic worth of their PGW holding? I do not know the answer to these questions.

What I do know is that PGW currently pays no dividend, so Agria will get no income from this investment. It is possible that PGW will pay a small final dividend, but I can't see any circumstance where it will be more than 1c per share and it may be nothing.

For these reasons I would not invest in Agria.

Agria has 50% insiders as investors and 20% mutual funds. I am sure that they are knowing why they purchased PGW.

The story of PGW being the southern hemisphere version of Monsanto is certainly a grand vision. It may yet have a happy ending. PGW has been aggregating disparate seed companies but so far has only accomplished the erasing of virtually all profits in their Agritech division. I think there is a divergence between 'the vision' and the reality of what has been achieved so far.

SNOOPY

[Master98]

According to PGC today's announcement, they sold 6.25m shares at 32c on 12/07, so today's 6.75m shares traded after market closed sure to be from PGC last holding at 32c, total 53m shares sold at average 0.297c( (40*0.29+6.25*0.32+6.75*0.32)/53=0.2973585).

[Agrarinvestor]

Has PGC sold all ists shares ? What are with the directors like Bruce Irvine , does he have to step back ?

What is the impact of price development for livestock like cattles. Is it good for PGWs shareprice ?

http://www.nzfarmersweekly.co.nz/article/9392.html

[Master98]

Has PGC sold all ists shares ? What are with the directors like Bruce Irvine , does he have to step back ?

What is the impact of price development for livestock like cattles. Is it good for PGWs shareprice ?

http://www.nzfarmersweekly.co.nz/article/9392.html

if PGW board has any directors from PGC, they should step down, annual result will be out end of next month, let's see.