I am no expert on corporate finance. But as an individual, I've noticed that when people or entities don't need money is when banks are happy to loan; not so much when they really do need money/capital.
For companies, I believe that banks look primarily at cash flow when determining eligibility for loans. Banks in China may use more or less restrictive criteria. I have no idea.
SIAF is now stating that three of six subsidiaries are can suppport their own development on their own. This is three more than a year ago. Of course, it is the other three that need funding. And next year, the remaining three will be self supporting.
Because all subsidiaries are separate operations with separate corporate structures, I doubt that banks look at the cash flows for the subsidiaries that would not be using the loans. In other words, the HU plantation cannot borrow money from a bank, and then SIAF turn around and use the money for SJAP. Yet, at SJAP. the abattoir and deboning facility construction is underway, and will in the future generate very good returns, if not spectacular.
To me, this explains why a private placement at a total return of 17% to accredited investors and possibly foreign institutions makes sense.
