Solomon Meeting Part 4 Tri-way

Solomon hopes to get sizable debt financing within two months for Tri-way and it will be game changing. There was only one question left to answer to the bankers. Other posters have mentioned $100 million or $150 million as size of the loan but I did not hear any exact figure myself. I was not on the whole meeting and also Solomon has had other meetings. Solomon wants more debt financing before taking private placement because then he will get better terms for the private placements. So some time after getting this sizable loan for Tri-way I guess they will consider private placements.

The debt financing is for Tri-way only, not for SIAF. It seems to be easier to get money outside of mainland China.

Solomon wants to use the debt financing as down payment to sub-contractors. The sub-contractors will then provide the rest of the financing of the project by waiting to get paid until Tri-way gets income from sale of seafood from the new buildings. Solomon thought it only right that the ones who make money from building the mega farm also helps with the financing. He thinks the build out can be done in 3-4 years with the combination of the debt financing and the financing from sub-contractors, at least such a solution is being discussed. Some of the sub-contractors are state owned.

I asked Solomon how he would avoid getting caught in a trap if seafood production takes longer than expected and the sub-contractors starts to want their money back. He replied that the sub-contractors will build only as much as they can afford and Tri-way will pay only as much as they can afford. I was convinced by his answer.

Regarding the old credit lines for Tri-way/Tri-way subsidiaries they were intended for working capital in China only and (my interpretation, didn’t get it all) since Tri-way was a Hong Kong company there were problems and also some tax or VAT or something would be triggered at 20+%. All in all it didn’t seem favourable or possible to use those loans.

I got the impression that Tri-way is doing very well operationally right now, I could read it between the lines of the discussion and Solomons enthusiasm. I am quite sure of this.

The $18 million fish pond in construction that SIAF has reported is actually construction in progress for Tri-way. So Tri-way owes us that amount.

SIAF will get a substantial amount of cash when Tri-way gets financing.

Tri-way will launch a website. Probably in October.

Tri-way has started to trade seafood. They have for example ordered 20 containers of squid. Soloomon believes that Tri-way will not even be able to saturate the local demand for seafood so that is one reason it is good to start with imports as well. Solomon see a very very big demand for seafood now and in the future as well. Tri-way will not even produce enough seafood for the local market (since the local market is so big).

There was also a little bit discussion about selling some of Tri-ways asset to get cash, but mostly in the beginning of the meeting before the new debt financing plans were known. However sale of Tri-wasy assets are not practical since the assets are so integrated, with one farm producing fingerlings for the other farms and similar things.

Regarding why the Tri-way dividend was delayed, because of that they needed to do an F-1 filing, shortly after they announced the target date in the summer it is because of the following reasons. Three out of four lawyers didn’t think the F-1 filing would be needed. SIAF called the SEC and asked and they said it was not necessary with F-1. SIAF asked for a letter of no action from the SEC but did not receive any such letter. In order to not risk any trouble with the SEC SIAF decided to go ahead with the F-1 filing anyway. SIAF did not communicate any of this to the shareholders because they didn’t want have a conflict with the SEC.

I asked Solomon when he thought that Tri-way will be listed. He said ok I will tell you but please don’t shoot me. I guess he meant please don’t shoot me if the time is not correct since it is only a target date.  Possibly he may also have meant that the target date is later than some shareholders had hoped for. Solomon mentioned two events, the first being in Q3 2019 – I guess this is when Tri-way is approved for listning in Hong Kong. The second date is Q1 2020 when Tri-way begins trading in Hong Kong. On a side note I have read that there is a three year requirement to be listed in Hong Kong (I think it is three years of business history needed) so for those people who knew about this it comes as no surprise that Tri-way will be listed around 2020. Of course most people in Scandinavia and other parts of the world are not familiar with Hong Kong listing procedures so it may be a tlittle bit dissapointing for them. On the bright side Tri-way will probably fetch a much higher IPO price if it is allowed to grow for a few more years before listing.

Solomon is having discussions with a few big funds to make an entry into Tri-way before the listing. However these are only discussions so far and we will see if it yields any results or not.


14 kommentarer till “Solomon Meeting Part 4 Tri-way”

  1. Fredde skriver:

    spännande, vad tror ni vi har för slutkurs sista december?

  2. Emilez skriver:

    Jag gissar på 30 kronor :-) Bara en gissning så klart.

  3. Jonas skriver:

    Intressant! Kan du ange vilka som var med på mötet med Salomon?

  4. Ny Siaf ägare skriver:

    Emilez, När du säger “Privet placement” menar du då Pre-IPO?

  5. Emilez skriver:

    Nja han sa bara private placement men det känns som att det är samma sak i stort sett.

  6. Jonas skriver:

    Emilez – Vilka var det som var med på mötet? Det vore väldigt intressant att få veta.

  7. HH skriver:

    Jonas – lägg ner. Var glad istället att Emilez överhuvudtaget lägger ner all denna tid och delger informationen. På ett, som det känns, väldigt objektivt sätt.

  8. Andreas skriver:

    Jag tror vi har en slutkurs på 14,10NOK sista december, vi får se vem som är närmast :)

    Känns som vi har hört om storslagna planer förut, och som alltid ta Solomons tidsram x Pi. Så 7 månader till åtminstånde innan vi ser ett större lån eller utdelning av aktier.

  9. Emilez skriver:

    Jonas, den enda jag vet som var där var signaturen C-MF på iHub.

    I övrigt var det Solomon och några andra investerare. Jag fick gå efter kanske 2/3 av mötet så jag hann inte prata med några andra av mötesdeltagarna.

  10. Emilez skriver:

    Ja Andreas förseningar är ju tyvärr nåt vi blivit vana vid. Vi får se.

  11. Erik skriver:

    Tack för att du delar med dig.
    Hur pass säker känner du dig att det stora lånet godkänns inom två månader (eller iaf i år)? (Alltså, hur mycket självförtroende utstrålade Solomon i frågan?)

  12. Emilez skriver:

    Hej Erik!

    70% säker på att det blir i år. Solomon lät självsäker. Det var bara en fråga kvar att besvara och med tanke på hur länge processen pågått med att dem fått högsta kreditranking och allt det där så känns det som att det är i slutfasen.

  13. Emilez skriver:

    Fast man får ju vara medveten om att SIAF är en högriskaktie, något man bittert fått erfara. Fast jag hoppas det vänder.

  14. Nakkikone skriver:

    One thing about Tri-way’s CFO. Checked and seems to be registered by a person called Au Channing. Similarly named fellow has been CFO of company called Value Exchange International. It’s OTC listed as well. I guess he took Tri-way’s position lately, because he is not anymore listed in their website as a CFO. Can’t find any official announcement, though. Are you able to confirm this?

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