November 12, 2015
Sino Agro Food seeks listing on Oslo Stock Exchange for aquaculture firm
Sino Agro Food, Inc. (SIAF), an integrated, diversified agriculture technology and organic food company, announced that it has begun the first of its four planned divestitures.
The company is currently exploring various opportunities for a spin-off including a separate listing on the Oslo Stock Exchange ("OSE") for a new aquaculture company. The OSE has more than 15 listed companies in the seafood sector, with a combined market capitalisation of more than NOK150 billion (US$17.4 billion).
Creating a separate entity is a decisive step towards SIAF's vision to become a leading aquaculture company. SIAF intends to distribute a majority of its holdings - in the new organisation - to its shareholders as a result of the spin-off.
"The company has received feedback from its current institutional investors and major retail shareholders, as well as advisors, that restructuring our businesses as stand-alone organisations will create better understanding with our shareholders as well as bringing more value," said Solomon Lee, the CEO of SIAF. "A separate listing of our aquaculture operations carries the additional advantage of facilitating a listing in Norway; a natural market for making our aquaculture opportunities known."
For some time, SIAF has sought a listing in the Nordic region to facilitate trading of its shares closer to its largest shareholder base. The company's recent focus has been to achieve a senior listing of the entire SIAF Group on the OSE soon. This process has been in motion since May 2015.
Given that the listing process will be more demanding than initially expected, the listing on the OSE will not occur during 2015.
The proposed new company will have one single share class and conform to Nordic corporate governance standards.
It is targeted to include the bulk of SIAF's aquaculture operations; specifically: Jiang Men City A Power Fishery Development Co., Ltd. (Fish Farm 1, "FF1"); Enping City Bi Tao A Power Prawn Culture Development Co., Ltd. (Prawn Farm 1, "PF1"); Zhongshan A Power Prawn Culture Farms Development Co., Ltd. (Prawn Farm 2, "PF2"); and Zhongshan New Prawn Project (ZSNPP) Phase 1 as well as an opportunity to acquire additional phases of the project as development continues. The ZSNPP is targeted to reach an annual production capacity of at least 200,000 tonnes over the long term.
By year-end 2016, when Phase 1 of ZSNPP is scheduled to be completed, the annual production capacity of the new company is expected to grow to approximately 15,000 tonnes.
After consultation with financial advisors, major shareholders, and several prospective institutional investors, several important advantages for the proposed structure guided SIAF's decision.
Establishing the new aquaculture company expedites several strategic objectives: simplifying the structure of Sino Agro Food, Inc. by creating a profitable aquaculture company focused on the production of seafood with unique expansion potential; creating a company with an independent board of directors, a shareholder nomination committee, a single share class, a separate management team and auditors, dedicated reporting and investor relations functions; exposing the company to institutional investors with in-depth knowledge and high appreciation of aquaculture businesses; facilitating funding to increase ownership in existing aquaculture facilities; and securing funding for the future development of additional stages at the Zhongshan New Prawn Project.