October 19, 2007

 

Chinese corn seed company to launch IPO

 

 

Chinese agricultural company Agria Corp is planning an initial public offering of American Depositary Shares, according to a Securities and Exchange Commission filing Thursday (October 19, 2007).

 

The company did not disclose the expected price range or size of its planned IPO, but indicated the offering price could total US$175 million.

 

Agria is engaged in research and development, production and sale of upstream agricultural products. The company currently offers corn seeds, sheep breeding products and seedling products.

 

Agria has access to about 27,000 acres of farmland in seven provinces, of which about 23,000 acres are used to produce corn seeds and 3,700 acres are used for sheep farming and breeding. The company owns about 17,000 sheep.

 

The remaining acres are used for seedling production and research and development.

 

For the six months ended June 30, Agria reported earnings of US$18.8 million on revenue of US$36.7 million.

 

Agria plans to use proceeds from the IPO to fund capital expenditures and business expansion.

 

The proceeds will also be used to expand research and development capability and for other general corporate purposes, including potential acquisitions.

 

Agria noted the offering price was estimated solely to calculate its registration fee and may change. The company also said a group of stockholders plans to offer ADS in the IPO.

 

The company's largest shareholder, Brothers Capital Ltd., currently holds an 84.6 percent stake in the company.

 

Credit Suisse Securities is serving as the IPO's lead underwriter. HSBC Securities, Piper Jaffray and CIBC World Markets are also underwriting the offering.

 

Agria plans to list its ADS on the New York Stock Exchange under the symbol "GRO."