Siaf has the right to buy parts of the farm at Book Value. The payback time for this project is like less then a year. It just can't be hard to convince a bank to give a short term loan for such a secure underlying investment.
The main question is still how to finance the buying of the Megafarm (> 50%)
I think I have the answer. I listened carefully to the CC, everything that Dan and Solomon said.
I think this is how they are going to do it. They will not sign the whole contract for the $240M. Just the first phase which equals 3 buildings or $40M. Solomon said the financing would be completed by the end of 2017 (for the whole amount).
They will sign this contract in the coming months (as per Dan).
SIAF will not buy into the MF any time soon. Neither will the JV partner invest more than 25%, that's obvious.
SIAF may use funds from the SJAP spin-off. Or, attract a partner. Or, if they can spin off the aqua division soon enough, use some of that money. But all of this is uncertain at this stage.
So all that remains, is extending the contract with the JV partners. Because SIAF is supposed to buy into the MF by the end of the year. Or maybe the SJAP spin-off will fix that problem.
However, they will use the funds from the SJAP spin-off to fund the canning division (as per 10-K). So I'm not sure how that will work for the MF.
I think you are right. It has been assumed in the past that the Mega Farm will finance itself fairly soon after the start. The financing outlined means that growth without dilution will be faster than otherwise. That is good news.
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