XI'AN, China, Jan. 9, 2017 /PRNewswire/ -- China Green
Agriculture, (NYSE: CGA) ("China Green Agriculture", "we" or the
"Company"), a company that mainly produces and distributes humic
acid-based compound fertilizers, other varieties of compound
fertilizers and agricultural products through its subsidiaries
in China, today announced that the Company had completed new
strategic acquisitions of two companies, Sunwu Xiangrong
Agricultural Materials Co., Ltd. ("Xiangrong"), and Anhui Fengnong
Seed Co., Ltd. ("Fengnong") in China. The Company's wholly-owned subsidiary,
Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., ("Jinong") a
company organized under the laws of the
People's Republic of China, entered into related acquisition
agreements of (i) Strategic Acquisition Agreements (the "SAA"),
(ii) Agreements for Convertible Notes (the "ACN"), and (iii) VIE
Agreements, with the shareholders of Xiangrong
and Fengnong on January 1,
2017.
On June 30 2016, in similar
transactions, the Company acquired six agriculture sales companies
in China. (The detail of the
June 2016 acquisitions is at:
https://www.sec.gov/Archives/edgar/data/857949/000114420416111996/v443872_8k.htm)
The current acquisitions followed up with the acquisitions from
June 2016. By entering into all these
strategic transactions, the Company is developing a new wholesale
business, in addition to its existing manufacturing and production
segments. Building a new wholesale business is the center of
the Company's expansion plan, which aims to transform the Company
from a manufacturer to a platform company.
Similar to the companies in June
2016 transactions, the two newly acquired companies,
Xiangrong and Fengnong, had been engaged in the sales distribution
of agriculture materials such as fertilizers, pesticides,
agricultural chemicals, for years. Dominant in their local
markets, the eight sales companies in total are forming the
Company's proprietary wholesale network.
Transaction Highlight:
- The new acquisitions rolled out phase II for the expansion of
wholesale business segment.
- The purchase consideration in total includes $1.2 million in cash, and $1.7 million in convertible notes.
- Convertible notes are due in 3 years with an annual fixed rate
of 3%.
- The per share conversion price of the note is the higher of the
following: (i) $5.00 per share* or
(ii) 75% of the closing price of the Company's common stock on the
maturity date.
The acquired companies are located in
the following two provinces in China:
|
Province
|
Number of acquired
companies
|
|
Anhui
province
|
1
|
|
Heilongjiang
province
|
1
|
*Such a conversion occurs if the performance of the
acquired company hit a minimum of 10% of annual compound growth
rate within the three years and if Jinong elects to have the note
converted into the Company's common shares. Whether to convert the
notes into cash, equity or a combination of both is at the
discretion of Jinong.
(The detail of the Jan 2017
acquisitions is at:
https://www.sec.gov/Archives/edgar/data/857949/000121390017000145/f8k010117_chinagreenagri.htm)
"We had successfully closed a new round of strategic
acquisitions. We welcome our new team members, the founders of
Xiangrong and Fengnong, on board," said Mr. Zhuoyu Li, President of the
Company, who is the architect and lead of
the acquisitions. "Let's work together to unlock the
intrinsic value of our Company. We will transform from a
manufacturer and wholesalers into a platform venture
jointly."
"I'm very happy with the success of this new round of
acquisitions at the beginning of 2017. Given the record, I'm also
equally happy with the performance of the other six companies we
acquired six months ago," said Mr. Tao Li, the Chairman and
CEO of the Company. "I have full confidence in Zhuoyu and his team.
I look forward to phase II in the expansion of wholesale
business."
About China Green Agriculture, Inc.
The Company produces and distributes humic acid-based compound
fertilizers, other varieties of compound fertilizers and
agricultural products through its wholly-owned subsidiaries, i.e.:
Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong"),
Beijing Gufeng Chemical Products Co., Ltd ("Gufeng") and a variable
interest entity, Xi'an Hu County Yuxing Agriculture Technology
Development Co., Ltd. ("Yuxing"). Shaanxi Lishijie Agrochemical
Co., Ltd. ("Lishijie"), Songyuan Jinyangguang Sannong Service Co.,
Ltd. (Jinyangguang"), Shenqiu County Zhenbai Agriculture Co., Ltd.
("Zhenbai Argi"), Weinan City Linwei District Wangtian Agricultural
Materials Co., Ltd. ("Wangtian"), Aksu Xindeguo Agricultural
Materials Co., Ltd. (Xindeguo"), and Xinjiang Xinyulei
Eco-agriculture Science and Technology co., Ltd.
("Xinyulei"). For more information,
visit http://www.cgagri.com. The Company routinely posts
important information on its website.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning the Company's business, products and financial results.
The Company's actual results may differ materially from those
anticipated in the forward-looking statements depending on a number
of risk factors including, but not limited to, the following:
general economic, business and environment conditions, development,
shipment, market acceptance, additional competition from existing
and new competitors, changes in technology, the execution of its
ten-year growth plan, a satisfactory conclusion of the pending
securities class action litigation and various other factors beyond
the Company's control. All forward-looking statements are expressly
qualified in their entirety by this Safe Harbor Statement and the
risk factors detailed in the Company's reports filed with the SEC.
China Green Agriculture undertakes no duty to revise or update any
forward-looking statements to reflect events or circumstances after
the date of this release, except as required by applicable law or
regulations.
For more information, please contact:
China Green Agriculture, Inc.
Mr. Fang Wang (English and Chinese)
Tel: +86-29-88266383
Email: wangfang@cgagri.com
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SOURCE China Green Agriculture, Inc.