Stock Code: 000553 (200553) Stock Abbreviation: ADAMA A(B) Announcement No. 2022-31
ADAMA Ltd.
Announcement on the Acquisition of 100% Equity of
Agrinova New Zealand Limited by a Wholly Owned
Subsidiary
The Company and all members of the Company’s Board of Directors confirm that
all information disclosed herein is true, accurate and complete, with no false or
misleading statement or material omission.
I. Overview of the Transaction
1. On December 5th, 2022. ADAMA New Zealand Ltd., (hereinafter referred to as
“Adama New Zealand”), an indirectly wholly-owned subsidiary of ADAMA Ltd.
(hereinafter referred to as “the Company”) signed the Equity Purchase Agreement with
George William McHardy, Iain Stuart Latter, Toddington Investments Limited and
Farm Road Trust to acquire 100% equity interest they jointly hold in Agrinova New
Zealand Limited (hereinafter referred to as "Agrinova" or “the target company”) at an
estimated price of NZ$37.5 million (hereinafter referred to as “the Transaction”). The
purchase price shall be finalized in accordance with the Equity Purchase Agreement.
Upon completion of the Transaction, Adama New Zealand will hold 100% of the equity
interest in Agrinova.
2. According to Shenzhen Stock Exchange Stock Listing Rules, Self-Regulatory
Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1 - the Standard
Operation of Listed Companies on the Main Board, Articles of Association and
Management Measures for the Delegation of Certain Powers of the Board of Directors
to the Chief Executive Officer (CEO) of the Company, the Transaction is within the
scope of the CEO’s authority and does not need to be submitted to the Board of
Directors and the general meeting of shareholders for consideration.
3. The Transaction constitutes neither a related-party transaction nor a material asset
restructuring under the Measures for the Administration of Major Assets
Reorganization of Listed Companies.
4. The Transaction has been approved by Sinochem Holdings Corporation Ltd.
(hereinafter abbreviated as “Sinochem Holdings”) and the relevant procedures for asset
appraisal and filing of the State-owned Assets Supervision and Administration
Commission have been completed.
II. Basic Information of the Counterparties
(I) George William McHardy
1. Name: George William McHardy
2. Address: Hastings, New Zealand
3. Place of Employment: Agrinova
(II) Iain Stuart Latter
1. Name: Iain Stuart Latter
2. Address: Levin, New Zealand
3. Place of Employment: Agrinova
(III) Toddington Investments Limited
1. Name: Toddington Investments Limited
2. Type of Enterprise: Investment Company
3. Chairman: George William McHardy
4. Place of Registration: New Zealand
5. Headquarter: Darvill Mellors & Co, level 1, 2-12 Allen Street, Wellington, New
Zealand
6. Main Business: Investment of Family Assets
7. Major Shareholders:
No. Name of Shareholders Shareholding Proportion
1. G W McHardy Family Trust 100%
8. Related Party Relations: Toddington Investments Limited is not a related party of
the company and it has no other relationships with the Company and its top ten
shareholders in terms of property rights, business, assets, debts and liabilities or
personnel, etc., which may cause or have caused the Company to favor their interests.
There is no business relationship between the Company and Toddington Investments
Limited prior to this transaction.
9. Integrity Status: It has been verified that Toddington Investments Limited is not a
defaulter.
(IV) Farm Road Trust
1. Company Name: Farm Road Trust
2. Type of the Enterprise: Trust
3. Chairman: Iain Latter
4. Place of Registration: New Zealand
5. Headquarter: Darvill Mellors & Co, level 1, 2-12 Allen Street, Wellington, New
Zealand
6. Main Business: Investment of Family Assets
7. Major Shareholders:
No. Name of Shareholders Shareholding Proportion
1 Iain Latter 50%
2 Emily Buck 50%
8. Related-party Relations: Farm Road Trust is not a related party of the company. It
has no other relationships with the Company and the top ten shareholders in terms of
property rights, business, assets, debts and liabilities or personnel, etc., which may
cause or have caused the Company to favor their interests.
There is no business relation between the Company and Farm Road trust prior to this
transaction.
9. Integrity Status: It has been verified that Farm Road Trust is not a defaulter.
III. Basic Information of the Transaction Target
1. Overview of the Target Assets
(1) Name of the Assets: 100% equity interest of Agrinova New Zealand Limited
(2) Asset Category: Equity investment
(3) Encumbrance: No mortgage, pledge or any other third-party claim on the Target
Equities. The transferred equity is not involved in any major disputes, lawsuits,
arbitrations, freeze or other judicial measures.
(4) Location of the Assets: New Zealand
2. Overview of the Target Company
(1) Name of the Enterprise: Agrinova New Zealand Limited
(2) Time of Establishment: 1993
(3) Location of Registration: 15 Sunlight Grov, Kenepuru, Porirua city, New Zealand
(4) Main Business: to develop, produce and sell plant protection products, growth
regulators, bio-solutions and plant nutrients for the horticultural market
(5) Shareholding Structure
The shareholding structure of the Target Company prior to this transaction is as follows.
No. Name of Shareholders Shareholding Proportion
1. Toddington Investments Limited 72.39%
2. Farm Road Trust 27.59%
3. George William McHardy 0.01%
4. Iain Stuart Latter 0.01%
(6) Target Company’s Key Financial Figures of the Last Year and the Last Period:
（1,000 NZD）
March 31st, 2022 Sep 30th, 2022
Key Financial Indicators
(for the year of 2021*） (April to Sep, 2022)
Total Assets** 13,836 18,985
Total Liabilities 4,994 8,385
Total Account Receivables 673 6,908
Net Assets** 8,842 10,600
Revenue 22,790 16,223
Operating Income 6,913 4,629
Net Income 4,883 3,333
Net Cash Flow from
4,019 1,205
Operating Activities
* The fiscal year of 2021 for Agrinova started on April 1st, 2021 and ended on March 31st, 2022.
**The numbers of total assets and net assets listed above are the book values and include debt that
will not be carried over after Closing, and not economic value of Agrinova, including the economic
values of its registrations, customer/supplier relations, brand value of GroChem in the local market,
etc.
Note: all the financial results listed above are unaudited.
(7) Integrity Status: It has been verified that Agrinova is not a defaulter.
(8) Restriction: There is no restriction on the shareholders’ rights in the Articles of
Association and other relevant documents of Agrinova other than which has been
stipulated in the applicable laws and regulations.
(9) Appraisal Status: PricewaterhouseCoopers Advisory Ltd. issued an asset appraisal
report for the Transaction. The benchmark date is March 31st, 2022, and both the
income and market approaches were applied for the valuation. As the result of the
income approach was recognized, the appraisal value supports the Transaction
consideration agreed in the Equity Purchase Agreement.
(10) Upon completion of the Transaction, Agrinova will be included within the scope
of the consolidated financial statement of the Company. As of the date of this
announcement, the Company and any of its subsidiaries do not provide any guarantee,
financial assistance to or entrust Agrinova for any financial management. Agrinova
never used the Company’s capital.
As of the date of this announcement, Agrinova does not provide any guarantee and
financial assistance to any other party and there is no operating business transaction
between Agrinova and the Company. Agrinova does not provide any financial
assistance to any other party in the form of operating business transaction after
completion of this Transaction.
(11) Operating Business Transactions
Agrinova leases land from a company controlled by Toddington Investments Ltd for
production at a rent of $127,000 NZD per annum, and the lease contract is valid for
three years. A further two rights of renewal for a term of three years have been agreed.
The land lease is a normal operational act for Agrinova to engage in production
activities and has no significant impact on the Company.
IV. Key Terms of the Transaction Agreement
1. Parties of the Transaction
The Buyer: ADAMA New Zealand Ltd., a wholly owned subsidiary of the Company
The Sellers: George William McHardy、 Iain Stuart Latter 、 Farm Road Trust 、
Toddington Investments Limited
2. Purchase Price: the preliminary purchase price of Agrinova on a cash-free and debt-
free basis is NZ$37.5 million and the purchase price for 100% of its equity should be
determined based on its preliminary purchase price of Agrinova and be limited by the
amount of net debt and net working capital of the target business as of the date of
closing.
3. Payment: Cash Payment
4. Payment Arrangement: Lump-sum payment of the purchase price on the closing date
5. Effectiveness: The Agreement is effective upon the signing of both the buyer and
the seller.
6. Date of Effectiveness: the signing date of the Equity Purchase Agreement
7. Period of Validity: valid for four calendar months after the effective date of the
Agreement or such later date as may be agreed by the Buyer and the Sellers in writing.
8. Pricing Basis: The Company contracted an appraiser to conduct appraisal of the
target assets and relevant procedures for asset appraisal and filing of the State-owned
Assets Supervision and Administration Commission have been completed. The
purchase price was determined based on the appraisal results and by mutual agreement
of the transaction parties.
9. Source of Funds: Self-owned Funds
10. Delivery Status of the Target Asset: Normal Operation
11. Restructuring: By consensus between the Company and the counterparties,
Agrinova will restructure after the Equity Purchase Agreement becomes effective,
mainly by divesting Agrinova's holdings in Grochem Australia Pty Limited, Gro-Chem
Horticulture Limited and Freshtec NZ Limited. Among them, Grochem Australia Pty
Limited, currently a related-party customer of Agrinova, will re-enter into a supply
agreement with Agrinova on the basis of ADAMA’s consent prior to the closing of the
transaction and will continue to purchase products from Agrinova at market price after
the closing of the transaction. Gro-Chem Horticulture Limited and Freshtec NZ Limited
do not have specific operating businesses and assets.
12. Main Closing Precedents:
(1) No material adverse event occurs to Agrinova.
(2) Agrinova completes restructuring.
(3) George William McHardy and Iain Stuart Latter sign employment contracts with
Agrinova.
(4) Relevant parties agree to change the actual controller of Agrinova.
(5) Agrinova re-enters into a land lease agreement with a company controlled by the
counterparty of the Transaction and re-enters into supply agreements with Grochem
Australia Pty Limited.
13. Closing: The closing shall take place after the satisfaction or waiver of all the
conditions precedent set forth the EPA (“Closing Date”).
14. Attribution of Economic Benefits During the Transition Period: Before the closing
date, all and any economic benefits, profits, interests and losses generated by the Target
Business corresponding to the Agrinova Equities shall be attributed to the sellers.
15. Earnout Payment: Provided that the Closing of the Agrinova Transaction is
completed, the Company may pay the sellers an earn-out payment capped at NZD 13.2
million depending on Agrinova’s actual EBITDA performance for the three-year period.
V. Other Arrangements in the Transaction
1. Employee Settlement: The Transaction does not include any employee settlement
arrangement.
2. Land Lease: Agrinova will keep leasing lands for production from a company
controlled by a transaction counterparty after the closing.
3. Potential Related-Party Transaction after Closing: The Transaction does not include
any potential related-party transaction.
VI. Purpose of the Transaction and the Effects on the Company
As its main business, Agrinova develops, manufactures and sells crop protection
products, plant growth regulators, biosolutions and plant nutritional’s primarily in the
horticulture segment. This Transaction will enable the Company to grow its product
portfolio in the New Zealand market and pave its expansion into the complimentary
segments of biologicals, plant nutrition and Plant Growth Regulators (PGR). Agrinova's
product portfolio targets the horticulture market, complementing the Company's focus
in New Zealand on row crops and fodder markets, and opening up a new, important
market segment for the Company. Agrinova's expertise in biologicals plant nutrition
and PGR is in line with Company's aim to increase its activities in the emerging market
of biological products, increasing its offering that supports sustainable food production.
VII. Filling Documents
1. The Equity Purchase Agreement
It is hereby announced.
Board of Directors of ADAMA Ltd.
December 6th, 2022
