Sino Agro Food Inc (OTCMKTS:SIAF) shares were up 4.89% on Friday to $3.65 and unchanged in after-hours trading. Share prices have been trading in a 52-week range of $2.72 to $8.95. The company has a market cap of $78.32 million at 21.46 million shares outstanding.
In a press release last week, Sino Agro Food Inc announced the carve-out of Tri-way Industries Ltd, which is its enterprise value assessed at $340.6 million, with Sino Agro Food, Inc. retaining and/or acquiring holdings of $124.7 million. This includes a provision for repayment of debt owed to the company. This confirms the company’s strategy to unlock the value of its current aquaculture business assets and plans for one of the world’s largest land-based aquaculture projects.
“This milestone represents one of the key steps in SIAF’s more than decade-long transformation. The Group strongly believes that separating into two industry-leading companies – one focused on the aquaculture industry and the other focused on investing in technology-based agriculture initiatives with substantial growth potential – will generate significant value for shareholders by enabling each company to focus on its specific business and strategic priorities,” said Solomon Lee, Chairman and Chief Executive Officer of Sino Agro Food Inc.
“For SIAF, that means becoming a ‘solutions destination”, supporting a wide range of agriculture endeavors through the delivery of value-added technology and world-class operations. Additional information regarding Tri-way’s progress will be disclosed as it becomes available,” he concluded.
The purpose of the carve-out is to provide Tri-way a means toward capitalizing on market conditions that currently support entities with strong aquaculture focus. Sino Agro Food Inc’s $124.7 million held interest in Tri-way represents 36.6% ownership in the company. After this, Tri-way will be registered as an “investment in associate” holding by SIAF, going forward.
As for Sino Agro Food Inc, the benefit is a deemed gain in the amount of $53,495,649 reflected in its consolidated statement of profit and loss account for the group and an excess of a 4:1 increase in enterprise value held in Tri-way.
Sino Agro Food Inc is an agriculture technology and natural food holding company that acquires and maintains equity stakes in a portfolio of companies to produce, distribute, market and sell protein food, and produce, primarily seafood and cattle. It provides consulting and services to joint venture partners to construct and operate food businesses, producing wholesale fish and cattle.
The company operates in five segments: Fishery Development Division operated by Capital Award, Inc. and Jiang Men City A Power Fishery Development Co., Limited; HU Plantation Division operated by Jiang Men City Heng Sheng Tai Agriculture Development Co., Limited; Organic Fertilizer and Bread Grass Division operated by Qinghai Sanjiang A Power Agriculture Co., Limited and Qinghai Zhong He Meat Products Co., Limited, among others; Cattle Farm Development Division operated by Jiang Men City Hang Mei Cattle Farm Development Co. Limited and Macau Eiji Company Limited, and Corporate and Others Division.