Replies to post #49008 on Sino Agro Food Inc (fka SIAF)

[RealDutch]

Yes. I was just saying because you pointed out, in this case, a 60-day payment term for WC2.

5.1 Payments

All payments are payable within 60 days from date of
invoices issued.

So it appears that the reserved funds towards acquisition of 75% of WC1 and WC2 are booked as "miscellaneous" deposits.

[RealDutch]

Do they really deposit that cash or do they just draw that amount down from the previous A/R and use the cash for something else?

Does it really matter? The first 25%, they deposit it, after they collect it. They are free to use the other revenues. Keep in mind that they have an "option" to purchase a 75% stake (except for WC1 and WC2 - the partner involved in those projects) where it was predetermined.

[RealDutch]

Now I understand a statement Solomon made 1 1/2 years ago. He said the JV partners don't care if the company repurchases stock from them at a lower price than the initial settlement price because they already made a profit.

By the time SIAF acquires a 75% stake, the JV partners already have 75% of their money back. But during that first year of operation (or two), 75% of the profits go to the JV partner because they own 75% at that stage. I don't know why I wasn't able to put my finger on that before today but that's because I wasn't sure what happened with that first 25%, or the timing of when JV's are officially approved.

It also explains why the JV have no problem accepting stock for debt settlement. Which I still think is mostly related to inventory build up and start up costs.

It's a great business model, these JV's. With many mutual benefits. Except for the JV partners dumping stock ;-)