Replies to post #49015 on Sino Agro Food Inc (fka SIAF)

[RealDutch]

As I said, after 4-5 years he gets all his money back and gets the annual profit for free.

Sooner than that, probably after 3 years. But you have a valid point. I think there is also a difference between FF1 and the other projects. With FF1, SIAF didn't make a lot of money from consultancy so in that case the JV partner probably recouped his money after 1 or 2 years. Hence, that statement from Solomon. But these days SIAF fetches a 60% gross margin and the contract value is much higher.

We still need to take a better look at what all those settlements are for. I see inventory stand at $18,887,433 and deposits for inventory purchases $4,940,767. So all that money had to come from somewhere, right? What else? Start up costs? Salaries? Do permits and approvals cost money? Prepaid expenses, for what?

Total debt settlement the past 2 1/2 years amounts to $35M. (S-1). That's not a lot of money, actually. But I'm still short. They may have used debt settlement for acquisitions. Perhaps land? Did they pay Riqiang with shares for the aquaculture contract? I suppose it's a mix.

[Helium-3]

So, the partner is desperate about getting some of his huge initial investment back. Let's face it: unless he is a billionaire, putting up 8-10m upfront is a huge investment for any investor. In many cases he has to take loans to come up with that money and needs to make payments. That's why he needs to sell all the shares he gets to make payments and recoup some of those millions back.

Vike, I thought I read somewhere (I can't remember) where the investors can't sell their shares for a period of time - 2 ,3 or 4 years, again I can't remember. Sort of like seed money where the investors are restricted from selling their shares during the initial start-up phase.