Asian Citrus (73 HK): Shares in the orange plantation group tumble on news of citrus greening outbreak

Deals Potion Tunneling Fraud:

  • Step 1: Record net gain on change in fair value of biological assets: FY09 RMB210.6m + FY10 RMB306m + FY11 RMB507.7m + FY12 RMB166.9m = RMB1.19bn. Note that the increase in sales from RMB668.5m in FY09 to RMB1.77bn in FY12 is RMB1.1bn.
  • Step 2: Book equivalent amount goodwill from acquisition of assets at inflated valuation: Goodwill on acquisition of BPG F&B on Nov 2010 = RMB1.16bn. Note that the “asset” of BPG, excluding PPE, is RMB1.13bn, an amount which include land use rights, construction-in-progress, intangible assets, deposits, inventories, trade and other receivables, cash equivalents.
  • Step 3: Write-off Net gain on change in fair value of biological assets: FY13 (RMB260.5m) + FY14 (RMB823.8m) = RMB1.08bn
  • Cash outflow from acquisition of BPG to related parties = RMB666.5m + RRMB505.4m (transferred out first from Asian Citrus to BPG before acquisition?)  = RMB1.17bn
  • Profit warning in Jan 2015 on fair value write-down, followed by HLB disease in April 2015

Hopu, Temasek among investors in Chinese juicer Asian Citrus

Eight investors, including Hopu Investment Management and Singaporean SWF Temasek Holdings, have purchased HK$1.55 billion ($200 million) worth of shares in Asian Citrus, the largest orange plantation owner and orange producer in China, to provide the company with capital needed to buffer its acquisition of BPG Food & Beverages Holdings Ltd. Asian Citrus announced last month that it would purchase BPG, a leading supplier of tropical fruit juice concentrates in the Mainland, which had been backed by Lunar Capital. Asian Citrus investors stricken by infection Shares in the orange plantation group tumble on news of citrus greening outbreak The Aim-listed company lost more than a fifth of its value on Wednesday Photo: Andrea Jones By Ben Martin 7:12PM BST 15 Apr 2015 Investors in Asian Citrus were pulped after the Chinese oranges business revealed that one of its plantations had been struck by a deadly disease. Shares in the Aim-listed company tumbled 2p, or 23.9pc, to 6.375p on the announcement that it had discovered Huanglongbing (HLB), better known as citrus greening disease, in trees at its Xinfeng plantation in Jiangxi province.The impact on Asian Citrus could be severe. It has three plantations, although only two – Xinfeng and Hepu – are in operation. The maiden harvest from the third, Hunan, is not due until next year. There are some 1.6m trees at Xinfeng and early testing suggested an infection rate of about 18pc, the company said. However, given it can take over a year for symptoms to show, ascertaining the extent of an outbreak can be difficult. HLB, which is borne by insects, is fatal to citrus trees upon infection. “The disease destroys the production, appearance and economic value of citrus trees,” Asian Citrus warned shareholders. “Diseased trees produce bitter, hard, misshapen fruit and die within a few years of being infected.” Asian Citrus, which is also listed in Honk Kong and last night had a market value of £99.3m, said it would launch a “comprehensive investigation” as it attempts to halt the infection. Although the company needs more time “to quantify the physical and financial losses”, it knew enough on Wednesday to caution that there would be a “significant” impact on the winter harvest. The infection deals yet another blow to Asian Citrus, which was last year hit by two typhoons and an outbreak of citrus canker, which renders oranges too ugly for sale.


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