Reid,
I don't know that the sale of additional shares to existing shareholders will necessarily be dilutive of CPPKY's stake in CHAROEN Pokphand Foods. Note this part of the article you sited:
<<"Charoen Pokphand Foods last year merged what had been four different publicly traded companies: Charoen Pokphand Feedmill, Southeast Asia's largest animal feed producer, Bangkok AgroIndustrial Products (BAP), Bangkok Produce Merchandising (BKP) and Charoen Pokphand Northeastern (CPNE) - the latter three producing a variety of agricultural or food products. Five other companies privately owned by the Chearavanont family were also merged.
The group's main unit outside of Thailand is the Hong Kong-based CP Pokphand, one of the biggest foreign investors in China. Charoen Pokphand Group, through all its units, is the world's second-largest producer of chicken, after Arkansas-based Tyson Foods. - Bloomberg">>
Remember that CPPKY is the Hong Kong-based part of the operation. I don't know exactly what percentage they own of the main merged group. However, if they had the option of purchasing additional shares as "existing" shareholders and they exercise that option, their percentage interest would appear to remain the same although their cash position and ability to invest in China ventures would be reduced.
All I know for sure is their percentage interest in the Feedmill as of their 1998 Financial Statements which mentions a restructuring. Whether it is the same one mentioned in the article or a different one, I'm not certain. According to page 59 of the 1998 financial statements "On November, 1998, as a result of CPF's (Charoen Pokphand Feedmill Public Company Limited) restructuring in Thailand, the group's share of CPF was diluted to 19.2%. As a consequence, the results of CPF for the year was equity accounted for up to November 16th, 1998, the date of the restructuring taken place and, thereafter, the interest in CPF is classified as long term investment."
It is quite possible that the official 1999 financial statements will be issued around the date of the May, 2000, shareholder's meeting. I noticed that the date on the 1998 statements was May 19, 1999. I believe that was around the time of the shareholder meeting last year. I will be interested to see what the footnotes to those financial statements look like. There are a total of 20 pages of various "Subsidiary, Associated, and Jointly Controlled Entities" in the 1998 financial statements.
Viv |
