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There's also the argument that even if they aren't returned, the company can just take the money they were going to use to pay the loan back at maturity and add it to the eventual buyback program so that in either scenario they are buying back shares. The SIAF story has always been a financing story. From the beginning, they needed funds and were able to use equity financing. Then they ran out of buyers, particularly when the Chinese stocks started earning their scam reputation, but eventually ECAB stepped in ending dilution and verifying that the business was legit after their extensive due diligence. That put an end to equity financing for a time and we saw how quickly the stock could move to the upside, but then debt financing delays for Tri-way turned Solomon to equity dilution through collateral shares which is better than pure equity dilution but has killed the stock price and provided fuel for shorts. Once Solomon has finally secured this financing, he will be able to finally give shareholders a reason to stop selling and actually buy.
And I'm not sure why everyone started freaking out about your post..I think the stock price has clearly made people a little edgy.
Do you know who this lender is? I was curious how you knew that they knew where the stop-losses were set.
He's probably talking about me. I've repeated what the company has stated multiple times that, "The company intends to see these 3rd party loans paid off and shares returned either by their respective due dates or sooner if funds become available".
There's always an enormous amount of speculation which almost always turns out to be wrong that tends to be accepted as fact on this board. We still don't know if or how many collateral shares have been sold, though based on Swede's share count he seems to think quite a large amount. Also, if sold, they could have been sold at much higher prices than now so if the majority were sold at $3-5 then they can continue buying up shares until those prices and not be at risk for huge losses. With the TF, the company has made payments and had shares returned multiple times. The concern is with Loan 1 and 2. For these loans we've also made a payment back but not enough to have shares reduced and returned but we'll find out about Loan 1 in a few days. Perhaps all shares will be returned and everyone will realize there was no significant boogeyman seller but themselves. Perhaps it will reveal it was the lenders selling collateral shares, we will see. I think everyone is looking for a reason as to why the stock price has been so weak but it is very often I hear people on this board who have said they have sold out or will not buy until they hear news etc. Many shareholders (including eventual institutions who are the only ones who really matter in the long run to me) are/have been waiting for the company to give them a reason to buy and up until this point they been working on it but failed to deliver anything. I think that's about to change and when the tide turns it will be swift.
I think RD posted his theory about skepticism towards the recent t-trades. After watching the trading going on the past few days, I think he may be right. Regardless, shorts are picking up pennies in front of a steamroller at this point. I think it's time for a PR on a loan announcement before the earnings announcement.
Any long term investor would prefer buybacks for an assortment of reasons. You may be right about cash dividends having a more immediate effect on the short term share price though. (I've heard your arguments extensively so no need to elaborate)
There are much larger owners than you in this company (whom I assume management AKA Solomon, is more likely to listen to) that would prefer all capital invested in the Mega Farm until the Mega Farm can provide sustainable cash dividends. Last I heard, Solomon prefers buybacks, so good luck changing his mind. I think we should be grateful he at least wants to buy back stock and not just blow it on another project.
One thing emptyone and I agree on is that if the cash becomes available due to the loan for Tri-way, it would be ridiculous to not buyback your stock at these levels strictly from a return on capital perspective until at least $10-20 (this is simply a guess and obviously up for debate). Then maybe it would be a better idea to allocate capital towards Mega Farm growth etc. The EPS growth from buybacks and reducing the sharecount alone would be enormous.
As always, it starts with conventional financing first which we're stuck waiting on an announcement for.
And to answer your Myanmar question: No not Solomon, and it involves using ponds for shrimp.
Danish group in Africa. Indoor, outdoor, I have no idea nor do I really care. If they ever close a CA deal it will be made public with all the important details I'm sure. I personally could care less about the details, just about how much a contract would be worth. The only reason I mentioned it is because those who sit on ihub all day looking for something to complain about instead of just selling their shares continue to incorrectly post that they're not doing anything with CA which is false. They are still actively working on new deals even though they slowed the others and seem to be making some sort of progress.
And if they ever close a new CA deal, then maybe you can get your cash dividend. I think the loan will only get us buybacks.
I still believe they will announce the loan. Your guess is as good as mine as to when, though I expect sooner than later. I am just as unhappy as every other shareholder with the destruction in share price dilution has caused. It is a fact, however, that the company has made very significant progress towards finally fixing this problem.
This is not my first rodeo and not the first time a stock has become severely undervalued because of fear and forced selling (or dilution in our case which is a form of forced selling). Usually it is margin call selling, in this case it is dilution or forced collateral share selling. What matters most to me are the fundamentals of the business and that the business is sound. Besides TRW's great growth potential, CA has recently made new potential consulting projects in Myanmar and Africa, which is in addition to the ones in Vietnam and Africa that had been slowed down.
By the way when all hope was lost with Pier 1 in march of 2009 it hit .09 cents only to go up over 21x in less than two months reaching $1.91 and up over 88x touching $8.08 just over a year later.
The problem with this stock price has always been due to a financing one (though others like emptyone have argued it is a management problem and he may be right since Solomon should really just be in charge of operations not financing decisions that led to this). But in my opinion when it is fixed, there will be a very large reaction in the price. And all evidence points to it being fixed very shortly with both smaller conventional loans and the bank syndicate loan. I am no fan of the share price and dilution as anyone else but there are people who agree with my long term view as well since there were some other serious buyers today. When the loans are taken care of, the price will take care of itself.
Loan 1: Maturity date 3/31/2018
TF A: Maturity date 09/30/2019
TF B: Maturity date 09/30/2019
Loan 2: Maturity date 10/01/2019
They are getting rid of the collateral loans. Not sure if you've seen Dan's comments on the collateral shares but I believe they are relevant to your comments/question.
"You asked about “top-up” and collateral shares. As a reminder there are 2 purposes for collateral share backed loans. One for SIAF (overall) and the other for a Trade Facility (backed by SIAF) for the Shanghai Distribution Center ( http://www.sinoagrofood.com/content/shanghai-distribution-center ). The trade facility (revolving line) represents about 70% of the collateral shares outstanding. Because of the drop in SIAF share price, the TF line has been reduced rather than attempting to issue additional “top-up” shares to maintain the maximum line allowable; last top-up on the TF occurred in Q3. The other 30% of collateral shares are held on third party loans, which currently represent around 2.7m shares outstanding. Again, the Company’s intends to see these 3rd party loans paid off and shares returned either by their respective due dates, or sooner if funds become available."
Very odd that someone wanted to all of a sudden start buying on Merkur today, regardless of pushing up the price. I guess if we get a loan announcement or some other trigger soon we'll know why..
AF4 used to be referred to as PF3.
http://sinoagrofood.investorroom.com/Q3-2016_Results
"Completion of the third building will bring total PF3 production to 10,000 MT by Q2 2019."
Their "target is to reach annual production of 6,000 MT by Q1 2018" with the two buildings so far. So finally adding this third building qne production capacity is a big deal.
They're not being cryptic, they're stating facts. As has been said before, they don't want to comment on the loan because then they're accused of "dangling carrots". I personally thought it was great to get an update on the loan last conference call. They did not need to do that or provide that many details but it provided quite a bit of clarity for shareholders who had inaccurate timeline expectations set by Solomon from his Oslo trip. Unfortunately, people have taken that constructive communication (even when Dan specifically stated the timeline wasn't in their hands) and accused them of leading investors to believe it would be done within the next two months at the latest..So now we have the policy of them only PRing when things are complete. I think everything has finally been worked out with the collateral on the loan and we will get a PR soon. We may even hear about other financing they have been pursuing as well. Please don't comment back; agree to disagree.
For those wondering how the loan is going, you should pay attention to below:
This was from the memo provided to shareholders at the end of last year:
"Upon loan approval, we plan to complete Phase 1 at AF4 with all needed components and build ODRAS ponds and next generation GODRAS ponds for production of Pacific white shrimp (L. vannamei) and other species. This is a conservative approach, less expensive than APM buildings, which will increase cash flow and allow profits to be generated to continue build-out of the entire facility, Phases 2 – 3, as originally planned."
From the PR yesterday:
"In terms of expanding our infrastructure in the next coming months, we plan to complete Phase 1 at Aquafarm 4 with all needed components and build ODRAS ponds and next generation GODRAS ponds for production of Pacific white shrimp (L. vannamei) and other species with targeted production to start Q2 2018."
Also from the memo last year:
"AF4 occupies 80 mu and the majority of the construction of two out of three APM buildings was completed by Q3 2016. The third APM farm (out of a three building production unit) targets completion in 2018, subject to capital funding. Alternatively, it can be completed organically by 2019, depending upon results of production."
So December last year they told us they would complete Phase 1 at AF4 by completing the third APM building "upon loan approval" or "subject to capital funding". We now found out yesterday that they plan on completing Phase 1 at AF4 in the next few months...hint hint. In December they also told us, upon loan financing, they plan on building ODRAS ponds and next generation GODRAS ponds for production of Pacific white shrimp (L. vannamei) and other species. Yesterday they not only told us they will begin building these ponds for Pacific White shrimp and other species, but specified that production will be starting in Q2 2018.
There are those who are again shouting that the "loan is dead". Keep in mind these are the same individuals who have shouted this repeatedly before only to find out each and every time from the company that the loan is actually not dead but progressing very positively.
Solomon and others around him have stated he will eventually delegate to a CEO he will choose/guide, eventually moving out of the way. I don't think anyone knows a timeline though. I would assume once financing is in place they will look for Dan's replacement as well. As far as I know Tony is potentially still being considered for CEO position of CA. Tony basically has the vision of eventually running CA from abroad once major contracts are in place, since CA entails deal making and tech transfer.
You can read the email from Dan:
From the CC you are referring to:
"Well I’m always reluctant to advise a timeframe because the banks are the ones who drive the time table. We do what we’re asked to do, we provide what’s necessary, we meet with who we need to, and in the end we work off of their schedule."
I agree though I personally expected the loan to be announced already but as I said before, when it hadn't I assumed the bank must have asked for something else like with the Tri-way audit or they were working on something else that was taking extra time. We just found out that was indeed the case with the collateral but it seems resolved thanks to the "sufficient resources from Tri-way partners".
"Loan approval remains positive" -Dan (CFO) last week
Loan approval is the most likely event and such an announcement will be like an FDA phase 3 approval announcement with a serious gap up in price in my opinion. At least we've now recently found out what's been taking so long which is the collateral work since a majority of the collateral seems to be coming from the Tri-way partners.
Instead of taking a rational approach and assuming there must have been further requests made by the lead bank or certain legal paperwork was taking more time (particularly since Dan specifically stated the timeline for closing is not in their hands), most assumed and started shouting "the loan is dead!" etc. Well now we know they were wrong, but I am sure we won't hear from them saying they were wrong.
Now we know the loan is not dead, is still progressing positively, and have some insight as to what they have been working on.
Did you write this or know who did?
https://www.redeye.se/arena/posts/sino-agro-food-staar-redo-foer-att-vaenda-den-laanga-bear-trend-bolaget-varit-i
Jag är övertygad om att vi kommer att få se ett lån för detta bolag inom kort, man har jobbat med detta under en längre tid nu och man har vad jag tror äntligen uppfyllt kraven och omvärderat säkerheter mot det framtida lånet. Man skall även komma ihåg att Sino Agro Food fortfarande flera större institut i ryggen.
Can any Swedes provide a better translation for this section?
Google translate gave me: I am convinced that we will see a loan for this company shortly, you have been working for this for a long time now and you have what I believe finally fulfilled the requirements and revaluated collateral against the future loan. It should also be remembered that Sino Agro Food still has several major institutes in the back.
Dan already rejected this idea you are trying to spread. Why do you guys keep using words about "toxic implosion" trying to scare people when it is simply not true?
From Dan's email: "You asked about “top-up” and collateral shares. As a reminder there are 2 purposes for collateral share backed loans. One for SIAF (overall) and the other for a Trade Facility (backed by SIAF) for the Shanghai Distribution Center (http://www.sinoagrofood.com/content/shanghai-distribution-center ). The trade facility (revolving line) represents about 70% of the collateral shares outstanding. Because of the drop in SIAF share price, the TF line has been reduced rather than attempting to issue additional “top-up” shares to maintain the maximum line allowable; last top-up on the TF occurred in Q3. The other 30% of collateral shares are held on third party loans, which currently represent around 2.7m shares outstanding. Again, the Company’s intends to see these 3rd party loans paid off and shares returned either by their respective due dates, or sooner if funds become available."
Current institutional holders have been buying. New institutional buyers are waiting until catalysts are officially announced. Retail has been selling because of delays in timeline expectations the company has set. Although I would love for these catalysts to occur today, they are taking time but are still progressing positively as Dan recently stated. This stock at this price should not be an investment for next week or the next few days. We have seen time and time again how quickly the price can jump on little volume and once news starts being released this stock can gap up very aggressively which is why I am obviously still invested.
Not sure if it was you who made the comment earlier but it is amazing how this board goes from euphoria to crying that the world is ending depending on whether it is up for the day or not.
RD, do you ever short this stock or are you always long? Your mercurial temperament is confusing sometimes. When the stock price is up for the day you are bullish and when it is down you are extremely negative.
This made me laugh out loud!
At the very least can we put enough pressure on management to finally sell FF 2?
RD any idea how much such a sale would be worth even with a write off?
Perhaps that's how you could realistically get some funds for your much wanted cash dividend. I could care less even if they distributed this as a special dividend.
Dan's comments: "we still have the property and we might find someone to take the land because of nearby industrial development going on and reaching maturity."
To this day, it amazes me how humans are so psychologically wired to chase price on the upside and suddenly become more bullish, as well as scream that the sky is falling on the downside and want to sell at terrible prices when the price falls. The fundamentals haven't changed for a while, yet the price swings have been huge.
Perhaps it was the post about Dan's email recently, which only confirmed what we already knew. Perhaps it was RD's speculation about A shares (of which I'm not sure has much weight there is behind that theory). Perhaps it was just the Chinese being done with dumping. If it was the email, I hope the company realizes more communication is actually a good thing not a bad thing, as long as they do it correctly by avoiding setting unrealistic timeline expectations.
Put my money where my mouth is? How about you fill my order in the 60's right now since you have claimed to everyone this stock is worthless and you are selling out? Are you still selling or have you changed your mind now that the price has caught a bounce recently?
As painful as it has been recently (though I have a long term view on this investment position), I have been continuing to buy on price dips particularly the last month, especially when people started shouting to just sell everything at whatever price to save what little they had like some shareholders were doing last week. For obvious reasons of putting myself at risk of front running, I don't like to publicly tell people when I'm buying (or selling in your case). I have likely picked up shares from your investment group members who sold out recently. If I were you and wasn't just all talk about wanting to sell out, I would probably sell into this strength. There seem to be some short sellers who need to cover and need your liquidity. Zero would probably be thankful.
Thanks for sharing this. Do you believe the selling we've seen is primarily retail selling? The selling the past few days (especially considering that the selling stopped today) suggests the selling was coming from China as RD suggested. There is obviously panic selling going on (never a prudent investment decision) every day since I see shareholders posting and emotionally screaming to sell or that they've sold out recently for an assortment of factually untrue reasons besides the fact that the stock price has been going down.
The Swede's share count (obviously prone to inaccuracies) seems to suggest as much as 5 million extra shares that have been sold onto the market that will have to be bought back at some point. Your recent post stated no additional top-up shares for the TF loan have occurred since Q3 since the Trade Facility line (70% of collateral shares outstanding) has been reduced rather than issuing top-up shares. If Loan 1&2 even with top-up shares being issued only stands at 2.7M shares, then it would seem that the collateral shares as the source of selling recently (past 3 months) is unlikely. It seems like it has been the fearful retail selling that is responsible for the collapse? Thoughts?
Unlike most on this board, I understand that the share price and fundamentals of a company can become very disconnected at times and view such events as opportunities when they do occur.
I can tell you for a fact that Solomon does not have sole control over what goes on with Tri-way's business decisions. I'll even give you one example: Tony has been designated as director of R&D. Solomon at one point wanted Tony to take over the operations at Aquafarm 4 but Mr. Chen the partner on AF 4 & 5 argued against it and prevented it from happening. Hopefully you can see that this means the partners have a very strong say in what goes on at Tri-way (different from what we are used to at SIAF).
For the Mega Farm (Aquafarm 4 and 5) Mr. Bill Chen was originally involved in construction. He was the person with the contacts for the land and became a partner because of that. Another Mr. Chen owned the hatchery (Aquafarm 2). He has been involved in the aquaculture industry for over 20 years. I have heard from several people including Tony that say he is very competent. Mr. Fang was one of Solomon's long-time employees and is also a partner I believe. He has been managing Aquafarm 1 and 2 for some time now where we have seen much success. There are others as well but Tri-way is far from a one man show. I suggest you go visit and see for yourself/ask questions and get to know them.
Empty, when Tri-way stops being so profitable and the Chinese stop eating fish. I do not let the price action dictate the prospects of a company, I let the facts do that. Unlike yourself, I as a shareholder I try to post/read about constructive ways to increase shareholder value to actually help our situation.
I have confirmed multiple times recently that the Tri-way loan is still ongoing and moving along positively with management confident it will close. RD has always talked about a cash dividend, which I believe would work but again would need to start with closing the Tri-way loan first. That is why the company has been so focused on closing the Tri-way loan. I strongly believe they will get it done and believe if you weren't so consumed with watching the daily price fluctuation of the stock every minute of every day you might see that all evidence points to a positive outcome as well.
So far your ideas to help the situation have been to fire all of management and now recently, put them in jail. If you have realistic or constructive suggestions I'd love to hear them, otherwise please stop responding back to my posts with your unproductive and useless bitter/rude comments that do not help your situation.
As I recently mentioned, Solomon and management is aware and I believe they will put out a statement. The faster they can announce secured conventional financing for early payoff of the collateral shares the better. This is not fun for anyone but at least they are doing the right things in my opinion to fix it.
Solomon has received the message I requested about putting out a statement and I believe he agrees.
The company has been doing everything they can to close the Tri-way loan ASAP but the timeline is up to the banks. We all know buybacks and shareholder friendly actions that will clearly be good for the share price can't happen without this closing first. They also are already in the process of securing conventional financing to pay off collateral shares early as well since shareholders have been able to convince them of the damage collateral shares (or speculation about collateral shares) have done to the share price.
There are countless people on here screaming for you to sell. You should do your own due diligence carefully and decide for yourself. I own shares and am a buyer at these prices so you may think my opinion is biased but all facts (not opinions) tell me the value in this company is worth enormous multiples higher than the given share price. Countless people have visited the operations, the company has paid cash dividends to shareholders before, and management has been unbelievably transparent with me. The company is already aware and actively working on the financing problems that have likely contributed to this price decline and in a year from now, I am sure the company will have accomplished these goals and the share price will reflect those accomplishments by trading at many multiples higher than they are now. I have never come across any investment that offers such a return, though the short term volatility can obviously be very extreme as we've already seen.
Most shareholders have gotten scared by the share price and are selling out and waiting until there is news about the ongoing Tri-way loan for $100M USD with the 5 banks. There is also short selling activity taking advantage of these sellers. The loan is essentially the first step before shareholder friendly actions like buybacks or cash dividends can take place. I think we may also hear news soon about new conventional loans to replace the collateral share loans since those collateral shares are likely responsible for the constant supply we've seen. However, the company has stated if they have been sold and they pay off the collateral share loans, then they will have to be bought back from the market and returned to the company where the shares will be retired.
At a minimum I will expect management to come forward and make a public statement in regards to this share price decline. I understand they do not want to announce "fluff" PR's and have been waiting for things to close to be able to announce tangible news but a statement from management restating their confidence, regardless of whether it helps the stock price, is needed at this point. They should publicly lay out their plan to address their plan to correct the collateral share financing and provide an update on the Tri-way loan without providing timeline expectations.
They did several investor tours already and I believe they wanted to have one this summer (assuming they had gotten things turned around by then with closed financing, shareholder friendly actions, price back up etc. basically happier shareholders)
They let aquaculture magazines visit, so I am sure you are more than welcome.
Garrett has also visited before. I would assume he has visited recently as well before buying up 5 million shares..
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=113016458
ECAB did due diligence for two years on SIAF before lending them millions. There has been an excessive amount of due diligence on the company. They also paid the F-share dividend and paid cash dividends for three years before (though nominal). The F-share dividend at this price would be an enormous yield. The problem has never been fraud, it has been financing as RealDutch said. They fixed it when ECAB came in and the stock exploded upwards, and then they started with the collateral shares and we have tanked. They are already trying to fix this and I believe their fix will be announced very shortly and the stock will explode once again. That is why I am invested; because the company is very profitable and has great growth prospects, and is very undervalued due to poor financing decisions that are about to be fixed finally. It is clear the sellers have come from retailers, short sellers causing excessive price drops, and collateral shares since the SC-13G's showed not only holding but continued buying from >5% owners of the company.
So that is now 3 confirmed beneficial owners who have increased their position in this company. (One has actually bought so much he made himself an insider)
12/31/2016 Forsakringsaktiebolaget Avanza Pension owned 2,778,385 shares.
12/31/2017 Forsakringsaktiebolaget Avanza Pension owns 3,456,006 shares.
12/31/2016 Nordnet Pensionsforsakring AB owned 2,296,348 shares.
12/31/2017 Nordnet Pensionsforsakring AB owns 2,718,846 shares.
And we all know Garrett's multi million share increase in ownership already discussed.