China-based Agria sets terms of IPO

China-based Agria sets terms of IPO

	Published : Thu, 25 Oct 2007 14:52 By : Agencies Print this Story

NEW YORK (AP) - Chinese agricultural company Agria Corp. has set the terms of its initial public offering of American Depositary Shares, according to a Securities and Exchange Commission filing Wednesday.

Agria expects the IPO to total 17.2 million ADSs and price between $14.50 and $16.50 each. The company plans to offer 12 million of the ADSs and the company's largest shareholder, Brothers Capital Ltd., plans to sell the remaining 5.2 million ADSs. Each ADS represents two ordinary shares.

Brothers Capital currently holds a 84.6 percent stake in the company and will hold 60.4 percent of Agria's outstanding shares after the IPO.

Assuming an offering price of $15.50, the company expects to raise about $167.7 million in net proceeds from the IPO, after expenses.

Agria is engaged in research and development, production and sale of 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 $18.8 million on revenue of $36.7 million. Revenues from the corn seeds, sheep breeding and seedling segments represented 47.9 percent, 39.6 percent and 12.5 percent, respectively, of total revenues.

Agria plans to use the net 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.

Credit Suisse Securities is serving as the IPO's lead underwriter. HSBC Securities, Piper Jaffray and CIBC World Markets are also underwriting the offering. The underwriters have an option to buy up to 2.6 million additional ADSs from the company to cover any overallotments.

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