GUANGZHOU, China, Sept. 4, 2014 /PRNewswire/ -- Sino Agro
Food, Inc. (OTCQB: SIAF.OB) is an integrated, diversified
agriculture technology and organic food company ("the Company")
with principal operations in the People's
Republic of China.
The Company is pleased to announce that it has closed a net US
$24,975,000 convertible note
funding with Euro China Capital AB ("ECAB"), a Nordic investment
house, on the 29th of August, 2014.
The convertible note carries an interest rate of 10.5% p.a.
fixed, a term of 5½ years, and a conversion price of US
$1.00. The principal amount of the
note is $33.3M.
The note is junior to any existing or new debt and does not
restrict the Company from adding any amount of new debt regardless
of form, and neither does the note restrict the Company from any
cash nor non-cash dividends to shareholders. The basis for any
subsidiary spin-off is set out in detail in the agreement.
The Company has covenanted and committed to discontinue the
issuance of equity to our trade suppliers and similar except for
those that have been agreed to prior to the signing of the
convertible notes agreement. The Company will settle all remaining
commitments of this kind during the third quarter, resulting in a
total number of outstanding shares of 170m.
Proceeds of the note will be used to complete the Company's
existing 5-year plan. The Company will meet with Euro China Capital
in Stockholm in September to agree
on a plan on how to best create shareholder value.
Sino Agro Food CEO Solomon Lee
commented, "I am very pleased to announce the agreement of this US
$25M convertible note funding. This is a major milestone in
Sino Agro Food's corporate strategy. We have now secured the
necessary funding to successfully complete the 5-year investment
plan we initiated in 2010, and gained a partner in Euro China
Capital with broad and valuable experience in the capital markets
that will help us to create better shareholder value."
Euro China Capital AB's Managing Partner Fredrik Danielsson
commented, "We have conducted extensive due diligence on Sino Agro
Food over the past two years and are impressed by the operations
that Mr. Lee and his team have managed to develop. However, it is
also fair to say that we have been less impressed by the Company's
ability to cost efficiently fund its impressive growth with the
help of capital markets. I believe shareholders of the Company have
found it painfully frustrating to see a constant dilution of the
share count at ever more depressed valuation multiples as a means
of financing the Company's growth ambitions. As part of this
convertible bond, Sino Agro Food has undertaken a commitment to
cease the issuance of new shares as a means to pay suppliers and
similar. Our ambition is that the equity will never again be used
as currency until it has reached a value that to some degree
reflects the fundamental value of the Company. With this foundation
and Mr. Lee's commitment to work with Euro China Capital now in
place, we are confident that we have established a platform from
which Sino Agro Food has the ability to transform its operational
success into value for all its shareholders. We are excited to get
involved and hope to be able to present our first initiatives
already before the announcement of the Company's next quarterly
report."
Complete Terms & Conditions of the convertible note can be
found on the Company's website and the 8-K filing of this press
release on EDGAR.
Summary of Terms & Conditions
Issue size at par
(US$m)
|
33.30
|
Net proceeds
|
24.98
|
Discount to par
|
25%
|
|
|
Conversion price
(US$)
|
1.00
|
|
|
|
|
Earliest date of
conversion
|
October
1st, 2015
|
|
|
Interest
|
10.5% paid
semi-annually
|
Tenor
(years)
|
5½
|
Issuance
date
|
August 29th,
2014
|
Maturity
date
|
February
28th, 2020
|
|
|
General
Undertakings
|
|
Equity issuance to
trade suppliers or similar
|
SIAF may not issue
equity to trade suppliers or similar as payments for amounts owed
for more than an aggregate amount of 5.5 USDm during the
note's tenor
|
|
|
Equity issuance to
employees, officers, directors and
consultants
|
SIAF may not issue
more than 8 million shares of common stock as contractual
entitlements to employees, officers, directors, consultants during
the note's tenor
|
|
|
Board of
Directors
|
Right to nominate one
Director
|
|
|
Chief Financial
Officer
|
Right of consent on
any change of Chief Financial Officer
|
|
|
Admission to
trading
|
Upon request the
Company shall use its best efforts to list the convertible note on
a recognized stock exchange
|
Financial
Undertakings
|
|
Financial
covenants
|
None
|
About Sino Agro Food, Inc.
Sino Agro Food, Inc. (http://www.sinoagrofood.com) is an
agriculture technology and natural food holding company with
principal operations in the People's
Republic of China. The Company acquires and maintains equity
stakes in a cohesive portfolio of companies that SIAF forms
according to its core mission to produce, distribute, market and
sell natural, sustainable protein food and produce, primarily
seafood and cattle, to the rapidly growing middle class in
China. SIAF provides financial
oversight and strategic direction for each company, and for the
interoperation between companies. The Company owns or licenses
patents, proprietary methods, and other intellectual properties in
its areas of expertise. SIAF provides consulting and services to
joint venture partners to construct and operate food businesses,
primarily producing wholesale fish and cattle. Further joint
ventures market and distribute the wholesale products as part of an
overall "farm to table" concept and business strategy.
About Euro China Capital AB
Euro China Capital (http://www.eurochinacap.com/en/) is an
investment boutique firm which funds and advises medium sized
companies, mainly European companies with a connection to
China or Chinese companies with a
connection to Europe. Funding can
come directly from Euro China Capital or through Euro China
Capital's extensive network of investors.
The partners of Euro China Capital have extensive experience of
business and finance including positions with leading private
equity firms, long experience of heading the Swedish Trade Council
in China, top-ranked equity
analyst in the Nordic countries over many years, as well as board
positions in domestic and non-domestic listed companies.
Euro China Capital strives to be an active partner where it can
help companies with strategy, in particular related to funding.
Through vast experience and network in the financial industry Euro
China Capital is proud to say that it is confident about its
abilities to unlock shareholder value.
Forward Looking Statements
This release may contain forward-looking statements relating to
the business of SIAF and its subsidiary companies. All statements
other than historical facts are forward-looking statements, which
can be identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions. These statements
involve risks and uncertainties that may cause actual results to
differ materially from those anticipated, believed, estimated or
expected. These risks and uncertainties are described in detail in
our filings with the Securities and Exchange Commission.
Forward-looking statements are based on SIAF's current expectations
and beliefs concerning future developments and their potential
effects on SIAF. There is no assurance that future developments
affecting SIAF will be those anticipated by SIAF. SIAF undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required under applicable securities
laws.
Not a Broker/Dealer or Financial Advisor
Sino Agro Food, Inc. is not a Registered Broker/Dealer or a
Financial Advisor, nor does it hold itself out to be a Registered
Broker/Dealer or Financial Advisor. All material presented in this
press release, on the Company's website or other media is not to be
regarded as investment advice and is only for informative purposes.
Readers should verify all claims and conduct their own due
diligence before investing in Sino Agro Food, Inc.
Investing in small-cap, micro cap and penny stock securities is
speculative and carries a high degree of risk.
No Offer of Securities
None of the information featured in this press release
constitutes an offer or solicitation to purchase or to sell any
securities of Sino Agro Food, Inc.
SOURCE Sino Agro Food, Inc.