(28-04-2015, 08:02 AM)leeeta Wrote: [ -> ] (27-04-2015, 10:13 PM)Happymeowmeow Wrote: [ -> ]what happens if there's no IPO at all?
Business still goes on albeit at a slower pace. Sino grandness can sell a stake of garden fresh to a strategic partner to grow the business or ipo later in another exchange.
Is a sale to a strategic partner a real option? Why wouldn't they have done it previously instead of raising money from the thai investor at such a low share price?
Managed to find time off my schedule to review SFIG's annual report.
Below are some of my notes:
2011 Convertible bond- Maturity Date is 30 June 2015. Under the worst case scenario where formal application to list SFIG is not made, it is mentioned a supplemental agreement was made with remaining bondholders for Garden Fresh to pay a simple cash interest of 3.5% of the outstanding principal amount from 20 Oct 2014 to 30 June 2015. It is expected to cost RMB 2.0 Million more. The maximum redemption bondholders can claim is RMB 183.8 Mil. Hence the total amount is RMB185.8 Mil
2012 Convertible Bond- Maturity Date is 25 July 2015. Under the worst case scenario where IPO is not filed, bond holders can claim a maximum of approximately RMB 466.6 Mil
Therefore SFIG has to prepare at least RMB 700 Mil before 25 July 2015 to prepare for the worst case scenario.
My thoughts: It does seem the 2011 bond holders still get interest for their agreement to extend. However to agree to only a 3.5% simple interest charged if the IPO does not materialize seems to imply this tranche of bondholders are confident of Garden Fresh's business.
Could this be interpreted that the bondholders "have no choice" but to accept?
what recourse do the bondholders have if the company just wants to pay less interest?
(01-05-2015, 08:29 PM)CY09 Wrote: [ -> ]My thoughts: It does seem the 2011 bond holders still get interest for their agreement to extend. However to agree to only a 3.5% simple interest charged if the IPO does not materialize seems to imply this tranche of bondholders are confident of Garden Fresh's business.
(01-05-2015, 08:29 PM)CY09 Wrote: [ -> ]Managed to find time off my schedule to review SFIG's annual report.
Below are some of my notes:
2011 Convertible bond- Maturity Date is 30 June 2015. Under the worst case scenario where formal application to list SFIG is not made, it is mentioned a supplemental agreement was made with remaining bondholders for Garden Fresh to pay a simple cash interest of 3.5% of the outstanding principal amount from 20 Oct 2014 to 30 June 2015. It is expected to cost RMB 2.0 Million more. The maximum redemption bondholders can claim is RMB 183.8 Mil. Hence the total amount is RMB185.8 Mil
2012 Convertible Bond- Maturity Date is 25 July 2015. Under the worst case scenario where IPO is not filed, bond holders can claim a maximum of approximately RMB 466.6 Mil
Therefore SFIG has to prepare at least RMB 700 Mil before 25 July 2015 to prepare for the worst case scenario.
My thoughts: It does seem the 2011 bond holders still get interest for their agreement to extend. However to agree to only a 3.5% simple interest charged if the IPO does not materialize seems to imply this tranche of bondholders are confident of Garden Fresh's business.
3.5% is additional to the 25% to be charged during the extended period between 20 Oct 14 and 30 June 15.
The outcome of IPO is uncertain. One does not know whether holders of 2011 bonds are confident of a successful IPO. (Of the RMB 100m 2011 bonds that matured on 19 Oct 14, 80.5% were extended to 30 June 15 and the remaining 19.5% were redeemed.)
Sino management has said that it is keen to redeem both 2011 and 2012 bonds when they mature, although bondholders want to extend their bonds to wait for listing for 23.4% stake in Garden Fresh.
The redemption amount for all bonds is RMB 650m if no IPO application is submitted before the maturity dates. Otherwise, it becomes RMB 580m.
The company had RMB 400m in cash on 28 Feb 15 and untapped credit lines of RMB 242m from PRC banks; and is talking to an international bank to borrow US$ 50m (RMB 306m). It should be able to pay off bondholders.
2014 profit of Garden Fresh was RMB 340m, excluding one-off charges related to convertible bonds. At 12 times earnings, Garden Fresh is valued at 4,080m, and bondholders' 23.4% stake is worth RMB 955m. This explains why they prefer stake in Garden Fresh to redemption (RMB 650m or 580m).
"talking to an international bank to borrow US 50m"
To me the above is scary, because why couldn't they get PRC banks to lend them the money?
(02-05-2015, 12:56 PM)newborn1000 Wrote: [ -> ]"talking to an international bank to borrow US 50m"
To me the above is scary, because why couldn't they get PRC banks to lend them the money?
Base on my understanding of China banking ecosystem, if international bank agrees to lend, it should be a very plus, rather than a negative sign.
After China recent relaxation of rules, more China domestic company will seek offshore loan, with lower interest rate.
(not vested)
(02-05-2015, 12:56 PM)newborn1000 Wrote: [ -> ]"talking to an international bank to borrow US 50m"
To me the above is scary, because why couldn't they get PRC banks to lend them the money?
Noted DBS being a principal banker for the group as disclosed in their annual report other than the other China based bank. Perhaps, the international bank they mentioned is DBS?
Also, think an international bank should be more assuring to investors.
Just for info pls.
DBS is also a banker for companies such as China Essence. Goldman Sachs was the bond holder.
Both DBS and GS have good international reputation.
tks.
(02-05-2015, 05:18 PM)butcher Wrote: [ -> ] (02-05-2015, 12:56 PM)newborn1000 Wrote: [ -> ]"talking to an international bank to borrow US 50m"
To me the above is scary, because why couldn't they get PRC banks to lend them the money?
Noted DBS being a principal banker for the group as disclosed in their annual report other than the other China based bank. Perhaps, the international bank they mentioned is DBS?
Also, think an international bank should be more assuring to investors.
Are you sure Goldman Sachs is the bondholder of China Essence?
(02-05-2015, 11:31 PM)Curiousparty Wrote: [ -> ]Just for info pls.
DBS is also a banker for companies such as China Essence. Goldman Sachs was the bond holder.
Both DBS and GS have good international reputation.
tks.
(02-05-2015, 05:18 PM)butcher Wrote: [ -> ] (02-05-2015, 12:56 PM)newborn1000 Wrote: [ -> ]"talking to an international bank to borrow US 50m"
To me the above is scary, because why couldn't they get PRC banks to lend them the money?
Noted DBS being a principal banker for the group as disclosed in their annual report other than the other China based bank. Perhaps, the international bank they mentioned is DBS?
Also, think an international bank should be more assuring to investors.