I did some research in this vacation, just want to share with you these information i digged out, I don't make these up, all excerpted from agria's annual report and news released by agria. if you have different reading from the reports and news please post your opinion.
1. I doubt Agria's ability to make money in China, look at the following Net income (loss) attributable to Agria Corporation since 2008.
2008 --- 751 million loss
2009 --- 135 million loss
2010 --- 59 million loss
2011 --- no mumber for whole year, only 18 million earning in the first 6 months, it's highly possible they hid some cost in the first 6 months, defered to second half year, who knows.
2012 --- 15 million loss
ok, you may argue that the major revenue contributor now is PGW, it will be a different story in 2013, then you should ask yourself one question, is Agria still a good investment if its domestic business lossing money? Think about this: if someone tells you that he wants to raise money and invest in a NZ company, would you rather invest in him than buying PGW share directly? why we need one more middle man?
2. Agria funded the acquisition of PGW partly through debt that matures between October 2012 and February 2014, and partly through equity financing in Agria Asia Investments through New Hope International, which holds an option to require us to repurchase its shares in Agria Asia Investments between May 2013 and May 2014. In other words, Agria shares 50.22% control of PGW with Ngai Tahu Capital Limited and New Hope International. GRO has 80.81% equity interest in this 50.22% of PGW, so at the end, as GRO holder, we only have 40.58% of PGW dividen.
3. Under a supplemental agreement, Agria Group agreed to provide guarantee to New Hope International for a minimal level of dividends to be distributed by Agria Asia to New Hope International. If Agria Group makes any payment to New Hope International under that guarantee, New Hope International will remit such payment to Agria Group once cumulative dividends distributed by Agria Asia to New Hope International exceeds the minimal guaranteed level. To secure the performance of Agria Group’s obligation in connection with this put option held by New Hope International, in June 2011, Agria Group pledged its shares in Agria Asia to New Hope International and Mr. Guanglin Lai, the chairman of our board, made a personal guarantee to New Hope International for Agria Group’s payment obligation in the event that New Hope International exercises its put option. Agria Corporation agreed to indemnify Mr. Lai against all the obligations, losses, costs, damages, expenses, liabilities, actions and demands that he may incur or sustain in connection with his personal guarantee.
In short, GRO has to pay New Hope a guaranteed minimal level dividen!
4. I don't believe Agria can be listed on Hongkong GEM soon, because Agria doesn't meet the management team requirement-- same management team for 2 years. The CEO and CFO resigned two months ago. Even the IPO application gets approved, I doubt the HongKong market will accept it, just look at agria's ugly performance in last 5 years.
5. about the delisting: moving to OTC market doesn't mean minority shareholders can not trade the stock, the real problem to Agria is it will affect the ability to obtain adequate financing for the continuation of operations would be substantially impaired.