PGW - PGG Wrightson

[Snoopy]

Agria's cash and cash equivalent 25.955 US$ millions - Cash of PGW 12726 (15.911 NZ $ *0,8 = 12726 US$)

AGRIAS own cash is currently = 13 226 million US$

without any Dividend from PGW, i believe Agria has no problems with its Debt.

Interesting point you raise about there being net cash in the kitty Agrainvestor. I agree with your calculation, but those figures applied at 30th June 2012. What is the cash situation four months on at the end of October 2012?

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If you look at Agria's 'Selling and General Admin Expenses', these were $US214.261m for FY2012.

From the PGW FY2012 annual report I get 'Selling and General Admin Expenses' of $NZ137.046m +$NZ102.224m = $NZ239.270m
Now, $NZ239.270m x 0.8 = $US191.416m.

That means the stand alone Agria 'Selling and General Admin Expenses' are: $US214.261m-$US191.416m = $US22.485m

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Back in the Agria FY2012 report, R&D expenses are $US5.043m.

From the PGW FY2012 annual report, R&D expenses are $NZ5.786m x 0.8 = $US4.628m

That means the stand alone Agria 'R&D Expenses' are: $US5.043m-$US4.628m = $US0.415m

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So now we can work out the stand alone Agria FY2012 annual running costs:

$US22.485m+ $US0.415m = $US23.260m.

Assuming those costs do not change year to year, then we might imagine the Agria running expenses for four months to be:

$US23.260m/3= $US7.753m

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Now go back to my post number 2260. There I estimate a stand alone Agria interest bill of $US6.3m. Over four months that is a cash outflow of $US2.1m.

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So overall running costs for standalone Agria over four months are:

$US7.753m+ $US2.1m = $US9.853m

I estimate standalone Agria income as zero, within the margin of rounding error, as per FY2012.

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Now we have all the numbers we need to estimate the net cash position of Agria as at 31-10-2012.

$US13.226m +$US0m - $US9.853m = $US3.373m

Agria is continuing to burn cash. So I am guessing Agria has a couple of months at the most before they can no longer pay their employees wages or their interest bill.

Effectively Alan Lai will wake up on Christmas day, go straight to the foot of his bed and find a large empty stocking there with a hole in the end of it. All his Christmas cheer will have leaked away, and he will have to send any employees nominally on the payroll home. It will all be over.

The SVP (David Pascale)of Agria wrote to my questions about the bank loans:

During the next month you have to renew a lot of debt. Is it possible that AGRIA have problems with the banks ?
[ Debt was related to PGG Wrightson investment. There is no issue anticipated with the company's bank syndicate. ]

It was already on record that Agria had renegotiated their NZ bank loan. You didn't ask what happens at the end of October when LIC wants their money back or in January when the US loans have to be renegotiated.

@Snoopy, you developed a small obsession with Agria going to collapse.
You never talk about the prospects. The world population will reach 9 Billions and AGRIA/PGW
are in the part of the world with a health and permanent growth. Don't focus to much on the Power of the dark side.

This dream has only until Christmas day to come true Agrainvestor. That is when the money runs out. Without a cash injection that will be the end of Agria, IMO.

SNOOPY

[winner69]

They must have read shoeshine comments ......hardly mentioned in the annual report commentaries yet every man and dog talked about at the AGM

[winner69]

Snoopy ...those million shares you sold to lighten your exposure ..... Balance bought them

Nice

[Snoopy]

http://finance.yahoo.com/echarts?s=G...urce=undefined;

Today investors bought 150.000 shares of Agria, 5 times daily average. Shortly before the Bell 30.000 for 0,95.
1$ is coming soon. If i got a chance tomorrow to add shares for 85 cent I will take the risk.

Someone bid the share up to 94c but it closed at 83c after trading as low as 75c. Plenty of shares available for you then Agrainvestor. There is a chance here for those who still hold Agria to sell to whoever is trying to manipulate the price upwards.
If you believe in the Agria story, why not just buy into PGW directly? That way you don't pay for the non productive Agria corporate costs and lose the risk of the dubious leverage. PGW has enough debt already without any more 'pork on a pig' IMO.

SNOOPY

[Agrarinvestor]

Someone bid the share up to 94c but it closed at 83c after trading as low as 75c. Plenty of shares available for you then Agrainvestor. There is a chance here for those who still hold Agria to sell to whoever is trying to manipulate the price upwards.
If you believe in the Agria story, why not just buy into PGW directly? That way you don't pay for the non productive Agria corporate costs and lose the risk of the dubious leverage. PGW has enough debt already without any more 'pork on a pig' IMO.

SNOOPY

>>to sell to whoever is trying to manipulate the price upwards.<<

Noboy is trying to manipulate Agria upwards.
Look at the last 10 trades of Agria on Oct 23td
22:03:09 0,83 3400
21:59:59 0,90 3200
21:59:59 0,91 100
21:59:59 0,90 100
21:59:59 0,90 1300
21:59:59 0,94 1800
21:59:56 0,94 10149
21:59:50 0,95 975
21:59:50 0,95 4025
21:59:49 0,94 400

Look at this:
http://finance.yahoo.com/echarts?s=G...rce=undefined;

I haver seen someone manipulating this up! Remember only small volumes have put this stock down to 70 pence in the past. This was only possible because all chinese stocks are fraud in the eyes of most american investors.

>>If you believe in the Agria story, why not just buy into PGW directly?<<

Agrias Market Cap is 50 Million $ PGW has a Market Cap 264 Million$, that gives me 50% of PGW shares for 50Million instead of 132 Million$
Oh excuse me, it is not 50%. Agria has more than 50%. Agria is the controlling shareholder of PGW. That means the remaining shares have only the right to get a dividend. Why should Agria give them a dividend ?
As we have learned, it is unimportant for Agria how high the shareprice of PGW is. If someone else than AGRIA wants to takeover PGW he have to talk to AGRIA first.
We have seen huge volume the last 2 days, for AGRIA and PGW, that tells me that some has a better understanding of
Agrias balance sheet than we have.
You predicted that AGRIA is bankrupt. I predict 1,5US$ until Christmas.
Be a sportsmen, Snoopy, and calculate the possibility that you bet on the wrong scenario.

[Queenstfarmer]

Agrarinvestor...If Agria need funds in the near future, it can only come from a PGW dividend. Agria's xmas stocking is empty. So shareholders will benefit from this ...51% or not Agria won't have a choice.

[Agrarinvestor]

Agrarinvestor...If Agria need funds in the near future, it can only come from a PGW dividend. Agria's xmas stocking is empty. So shareholders will benefit from this ...51% or not Agria won't have a choice.

Agria has recovered 30% of there all time low. Do you really thing that big guys are buying if AGRIA is going bankrupt ?
They will pump this share above 1$, i beleave they will target a 2 Years high. PGW had a turnaround and Agrias chinese seed business is generating cash (300.000US$)
The only point is the interest rates for PGW, thats all. And with these success story of the last 12 month, they will get new loans.

[Agrarinvestor]

They must have read shoeshine comments ......hardly mentioned in the annual report commentaries yet every man and dog talked about at the AGM

PGG Wrightson shareholders have been told there is “zero chance” of Chinese half-owner Agria going under amid speculation about its financial health.

At PGW’s annual shareholders meeting in Auckland today, Agria chairman Alan Lai – also a PGW director up for re-election – was asked to reassure shareholders about his firm’s financial health.
He said twice there was “zero chance” of Agria being put into receivership

http://www.nbr.co.nz/article/pgw-sha...lder-dw-131185

[Snoopy]

You predicted that AGRIA is bankrupt. I predict 1,5US$ until Christmas.
Be a sportsmen, Snoopy, and calculate the possibility that you bet on the wrong scenario.

What I am saying to you Agrainvestor is that the published Agria accounts do not lie.

We do not know exactly what has happened to the Agria accounts since the June 30th balance date. But I think we can be sure that if anything materially positive had happened then Agria would let the market know. In the absence of such knowledge, it is realistic to assume that the interest on borrowings must be paid at the same rate it was in the year ending 30th June. Furthermore, in the absence of alternative announcements, we can only assume the running costs of Agria (staff and rent and utilities) have not changed either. I don't believe we can assume a sudden turnaround at Agria's Chinese domiciled investments is creating significant profit for Agria, when no profit, within the bounds of rounding error, was created last year (FY2012).

Around Christmas day Agria will run out of cash, all things being equal. I see no way around this scenario.

However, the banks in America will probably not want to own half of a rural supplies company in NZ. So maybe, just maybe they will extend those US loans and give Agria more cash so they can continue for another year? The other alternative is a cash injection from an existing large shareholder. This could happen but if it does then existing small Agria's shareholder interests will be diluted. Not a good situation for existing holders of Agria shares.

Your point about owning a controlling interest in PGW for less cash, due to Agria's leverage, is well made. However Criag Norgate, via Rural Portfolio Investments (RPI) tried to do the same thing to PGW, and RPI went broke once the divdend flow from PGW stopped. I do not believe that PGW is suitable for the leveraged investment approach that was tried by RPI and is now being repeated by Agria. Farming is just too volatile to make borrow and hope work.

SNOOPY

[Snoopy]

Agria is the controlling shareholder of PGW. That means the remaining shares have only the right to get a dividend. Why should Agria give them a dividend ?

Because it is the law. If PGW pays Agria a dividend then PGW must pay all other shareholders a dividend as well. There are no second class shareholders at PGW. Queenstfarmer is on the money with this.

SNOOPY