Sino Agro Food Inc (fka SIAF)

[Trip-Fontaine]

Suppose TRW issues 20M (preferred) shares for $3.40 and raises $64M.

I dont see how this could be possible. Maybe sell it to current Siaf share holders who seemed to be happy to get the shares at 3,40, they might as well buy them at 3,40. Other larger investors probably not.

They can probably get more than $3.40 for it. Closer to $5 by now, IMO

Based on the fantastic recent performance of TRW and management? Seriously, with preferred shares you would need a carrying interest (which is the same as a dividend) and you need to buy back these shares at a certain time. Considering the track record of dividends, buy backs and loan repayment AND their ability to do this on time, that idea is dead from the beginning. The discount on those preferred would have to be huge from day one, especially if its not possible to trade them on a open market.

Issuing ordinary Siaf shares, or loans with Siaf shares as collateral is no problem for Solomon since its not diluting his control of Siaf. But if he does anything with TRW as collateral, he could lose it all since he has no A shares in TRW. Thats also why he wont dilute TRW (at least not until he can get a fair price). Expect raise of A/S in Siaf, and/or an offer to Siaf retail shareholders to buy TRW shares at p/e 15-20. IMO