More than fair for us. The partners of the MF were looking for investors before the carve-out, obviously. And they had to pay 1.5x book IIRC. But SIAF can buy it for 1x book. That's basically what happened. Because the partners want SIAF to have a big stake in this.
Even if what you say is true, it doesn't matter. Because SIAF never owned those farms. They have a right to acquire up to 75% of those farms for book value. SIAF would have to pay it from the 35% of profits from consultancy. So basically 75% is too high to begin with. Which is one of the reasons why they were never able to acquire PF1 or PF2. Because they didn't have the money. And the farms just kept on growing, becoming more expensive to acquire.
The benefit is that SIAF won't be diluted. I guess it's the partners' turn to be diluted. I don't know why it's in SIAF's name. Possibly to protect against a hostile takeover. SIAF probably controls the BOD as well, for the time being.
No, it's the same partners. SIAF only owns the 36.6% and will not be diluted during the pre-IPO. When they sell the 32% to pre-IPO ivestors the money will not go to the partners because TRW needs it. My guess is, $150M (or most of it) will be booked as debt owed to the partners. And they will get paid from the IPO money, later on.
They must have their reasons. They get a capital injection this way too. At least we won't get diluted until the IPO. The partners also want to see a return on their investment early on (if you could call the IPO early). Because they invested so much money and are not seeing a dime in return. At least not the MF partners.
It's all about cash flow. Everyone has to make sacrifices. But overall I was rather impressed with the result. I couldn't have done it better myself. The $30M that TRW paid for the master license, increases SIAF's stake in TRW while reducing cost for TRW for AF5. A win-win from a cash flow perspective. Also keep in mind that there's another $20M or $30M due from TRW. We still have the fish pond worth $18M, and a $6M deposit for FF2.
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