Replies to post #55687 on Sino Agro Food Inc (fka SIAF)

[sopis]

That is nothing but a qualified guess with own assumptions. This is my guess. Solomon wanted to build all he possibly could build in a short period of time and thought that would be in the best interest of share holders.

[viking86]

Then, later that year, around December, the price of sleepy cod suddenly collapses and now Solomon has another problem because he misses out on roughly $8M - $10M in projected earnings. At this time they are already fully committed towards building the abattoir.

yes I think you got it all basically right.

Only thing to add there is the decision to list on FN, as Sly pointed out, was hatched at the Investor Tour in Sep'12 when they had a closed door meeting with Nisse and the guys from Penser Bank as I recall. Enlisting PB as a CA had its cost and maybe was another reason why they needed to issue more shares right after the tour. Also, it took them probably 6 months to obtain the license for operating the abattoir. We know it was very difficult to obtain. Since they started construction of the abattoir in April 2013, it makes sense that the decision to go for the abattoir was made atabout the same time as the FN listing. In summary I think that they were unexpectedly short of about $7-8m in Q4'12 b/c of the price slump of sleepy cod so they had to issue the additional 14m shares to close the gap of the capex budget.

From Q1'13 earnings report:

Construction of the abattoir, deboning factory and related packaging facilities commenced April 21, 2013.