Not good:"AgriBioTech CEO Sells Own Shares After Margin Call Las Vegas, Feb. 9 AgriBioTech Inc. Chief Executive Johnny Thomas said he was forced to sell half his stake in the turf and forage seed company he helped found, after lenders demanded he pay back borrowed funds.
Thomas said he sold 901,707 shares to the State of Wisconsin
Investment Board for $5.25 a share, a 14 percent discount to the
stock's closing price yesterday of 6 1/8. Another, unnamed
AgriBioTech manager sold 443,740 shares.
Thomas said he funded the company's growth by exercising
options and warrants to buy AgriBioTech's stock using borrowed
money. He said he will use proceeds from the sale to pay the
money back.
''I am extremely disappointed that I was forced to forfeit
half of my share ownership due to market conditions at a time
when business fundamentals of the company are at an all-time
high,'' Thomas said in a statement released after U.S. markets
closed.
Thomas said the shares were placed with the Wisconsin board
to ''minimize the impact'' on the marketplace. The sale boosts
the Wisconsin board's stake in Las Vegas-based AgriBioTech to
more than 10 percent.
AgriBioTech's shares have fallen 59 percent since Jan. 12
amid concern about its ability to fund growth and disappointment
over a failed attempt to sell the company. Last month,
AgriBioTech said it had called of its search for a buyer because
of ''market conditions.'' People familiar with the attempted sale
said the company received no bids.
Acquisitions
AgriBioTech built itself up over the past four years by
acquiring 33 small turf or forage seed companies. It aims to
become an attractive partner for biotechnology companies, who
need access to seed to distribute their plant-enhancing genetic
technology, and to create genetically enhanced seed of its own.
The company was able to use its rising share price, which
reached a high of 29 1/2 last June, to finance acquisitions and
to attract a respected management team with stock options. The
shares declined as it became clear that forage seed such as
alfalfa is not as attractive to biotechnology companies as corn
or soybeans.
The company will report its fiscal second-quarter earnings
on Feb. 11. It is expected to post a loss of 6 cents a share,
according to the average estimate of three analysts surveyed by
First Call Corp. AgriBioTech lost 5 cents a share in the year-ago
quarter.
At the same time as he sold his shares, Thomas relinquished
voting rights to 228,500 shares he gave as gifts to his wife and
children, the company said. He also gave up title to 60,000
shares he had planned to give to charity." |
