Stock Code: 000553(200553) Stock Abbreviation: Sanonda A(B)
Announcement No. 2019-3
ADAMA Ltd.
Announcement on the External Guarantees Provided by a Subsidiary
The Company and all members of its board of directors hereby guarantee that the
contents of information disclosure are true, accurate, complete and without any
false record, misleading statements or major omissions.
I. Overview
Following the Announcement on External Guarantees Provided by a Subsidiary
published on October 31, 2018 on the website www.cninfo.com.cn, and in the
context of the transaction whereby a US-based, majority-owned, indirect subsidiary
("Acquiring Subsidiary”) of Adama Agricultural Solutions Ltd. (“Solutions”), a
wholly-owned and controlled subsidiary of the Company, has acquired the entire
equity of Bonide Products, Inc., a US corporation, the Acquiring Subsidiary is to
finance a part of the transaction purchase price by way of a bank loan to be received
from a banking institution.
According to the loan agreement signed between the Acquiring Subsidiary and Bank
Leumi USA on January 7, 2019 (the "Bank" and the "Loan Agreement"), Solutions
has provided the Bank with a limited guarantee letter, according to which it
unconditionally and irrevocably guarantees the Acquiring Subsidiary’s payment of
any outstanding principal amount and interest under the Loan Agreement, not
exceeding USD 40 million (RMB 275million ).
The minority shareholder in the Acquiring Subsidiary is providing a back-to-back
counter guarantee to Solutions, pro-rata to his holdings.
According to the Proposal on the External Guarantee Limit of 2018 approved by the
4th meeting of the 8th session of the Board and the Annual Shareholders Meeting
2017, guarantees provided by the Company or any of its controlled subsidiaries to
any of their controlled subsidiaries and/or held companies in favor of their activities
in bank accounts and/or other financial institutions, such as bank credit lines,
financing and credit activities, shall not exceed RMB 2,250 million over the full
year.
The aforesaid guarantee is provided by Solutions, the controlled subsidiary of the
Company, in order to finance the acquisition being performed by its controlled
subsidiary. As the guaranteed amount is within the amount approved by the
shareholders meeting, no additional approval for the aforesaid guarantee is required
from the Board of Directors of the Company.
II. Basic Information of the Warrantee
Name of the Warrantee: Control Solutions, Inc.
Established Date: March 27th, 1985
Registered Address: 5903 Genoa Red Bluff Rd., Pasadena, Texas, USA
Chairman of the Board: Moshe Givon
Registered Capital: $824.20
Business Scope: Chemical manufacturer in the Pest Control, Turf & Ornamental,
Consumer Products and Professional Animal Health Care markets
Relationship with the Company: Indirect controlled subsidiary - Solutions, a
wholly-owned subsidiary of the Company, holds 67.11% of the equity of Acquiring
Subsidiary, while the rest is held by a private individual, serving as the President and
CEO of Acquiring Subsidiary.
Recent financial situation of the Warrantee is as follows:
Period Total Assets Total Debts Equity Equity Assets
attributed Liability
to the Ratio
Owner of
the Parent
Company
By the end USD129,401,044 USD USD USD 68.7%
of Dec 31, 88,895,673 40,505,472 27,179,171
2017
By the end USD USD USD USD 64.9%
of 107,960,878 70,050,731 37,910,147 25,437,709
September
30, 2018
III. Main Contents of the Guarantee Contracts
The main contents of the Guarantee are as follows:
(1) Maximum guaranteed amount: USD 40 million (RMB 275million), plus any
applicable interest.
(2) Type of Guarantee: unconditional and irrevocable.
(3) Guarantee Scope: Guarantee of payment of any outstanding amount under the
Loan Agreement.
(4) Guarantee Period: The loan term (5 years) and any applicable statute of
limitations period (generally 7 years).
The guarantee referred to herein is provided in favor of the actual acquisition needs
of Acquiring Subsidiary. The Warrantee is a controlled subsidiary of the Company
that has stable business operations and there is no risk of it not being able to repay its
debts or perform its obligations. Additionally, the Company can control the
management risk and financial risk of Acquiring Subsidiary. Therefore, the
Company’s interests will not be harmed.
IV. Accumulated Quantity of External Guarantees and Overdue Guarantees
Currently the balance of the guarantees that have been provided by the Company
and/or its subsidiaries is USD 181M (RMB 1,242M). After providing the above
guarantee, the balance of the guarantees provided by the Company and/or its
subsidiaries is USD 221M (RMB 1,517M). This amount accounts for approximately
8.08% of the latest audited net assets of the Company.
No guarantees were provided by the Company and/or its subsidiaries for the favor of
entities not consolidated in the Company's financial statements.
The Company and its controlled subsidiaries do not have overdue guarantees.
V. List of Reference Documents
1. Guarantee Letter provided by Solutions to the Bank.
It is hereby announced.
Board of Directors of ADAMA Ltd.
January9, 2019
