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Replies to post #116734 on Sino Agro Food Inc (fka SIAF)
Referencing the Company’s US$20m Trading Facility entered into in September, 2016 secured through issuance of shares at $12.50 / share for a period of 3
years. The said Trading facility was obtained for application by the Shanghai Distribution Center (“SDC”), such that SDC is responsible for payments of all
related financial costs and fees (i.e., a one-time only establishment fee for the usage of letter of credit (“LC”) facilities and for documents against payment
(“DP”) facilities, a transaction fee of 1.5% to be paid on supplier’s invoice value per transaction).
However, there is a service fee associated with the return of the securitized shares to the Company at maturity calculated at a discount of 20% of the
prevailing market price of the shares at date of return (the “Service Cost”). For example, if the market price of the Company’s shares is $15.00, then the
Service Cost will be $3.00 per share, thus the Company will need to pay $3.00 per share to regain the shares assuming that the full $20M has been fully
subscribed and repaid by SDC and there will be no other transactional financial costs and fees left outstanding and unpaid. As such, at the completion and
maturity of the Trading Facility arrangement, SDC will reimburse the Company on the said Service Cost. In the Company’s records these are non-cash
transactions, the securitized shares issued each time are being debited to SDC’s account owing the said number of shares to the Company with a transaction
ledger recording its corresponding transactions periodically.
The Company entered into loan and pledge agreement with a Shanghai, P.R.C. based lender (the “lender”) The lender has various trading facilities and
has agreed to allow the Company or its nominee to use parts of trading facilities up to an amount of $20 million (31.12.2016: $20 million) to be used in
tranches and revolved up to a period of three years, of which $13,945,400 (31.12.2016: $13,982,640) was utilized.
AI
