AgriNurture board 'confirms' stock rights offering for the 5th time in three years

The Antonio Tiu-owned AgriNurture [ANI 6.03 ?0.33%] disclosed that its board had “confirmed” the terms of its stock rights offering that was originally approved back in February of 2018. The “confirmed” terms are 1 stock rights share for each 2.5 ANI shares owned at the date of record (1:2.5 ratio), at an offer price of P1.00/share, for a total number of shares on offer of 288,000,027 common shares. The confirmation did not include any information on the ex-date, record date, offer period, or listing date, but it did say that ANI is looking to conduct the stock rights offering (SRO) to “provide additional working capital to support the growth and strategic initiatives of the Corporation's core businesses”.

MB BOTTOM-LINE

ANI’s stock price is less than half of what it was when this SRO was first approved in 2018, and the SRO itself has gone through a lot of changes in the 4 amendments that followed that 2018 announcement. Initially, the February 2018 entitlement ratio was 1:2.5 when ANI was trading at about P12.00/share. That was amended in December 2018 to 1:5 when ANI’s stock price had risen to P17.00/share. In March 2020, the ratio was tweaked back to 1:2.5 when ANI’s stock had tumbled down to just P7.00/share, and the number of shares to be sold was amended up to be almost double the initial offer.

By October of 2020, though, the SRO terms were amended again, this time to include one warrant for every 3 SRO shares availed, and the number of shares on offer was reduced by 25%. This latest amendment appears to do away with the warrant, keep the 1:2.5 entitlement ratio, and slightly shrink the number of shares on offer by about 10%, nearly matching the terms of the original offer made in 2018. For ANI shareholders, this has got to have been a wild ride!  Back in 2018, an investor holding 1000 shares of ANI worth P12,000 would have been able to buy an additional 400 shares for just P400, increasing their holdings by 40% by spending just 3.3% of their total holdings. In accordance with this latest disclosure, an investor holding 1000 shares of ANI worth P6,000 will be able to buy an additional 400 shares for just P400, increasing their holdings by 40% by spending 6.7% of their total holdings.

While it would still be great to buy the stock at an 84% discount, by keeping the entitlement ratio and offer price the same despite a 50% stock price drop, the “value” of the offer is also effectively halved for ANI investors. That also assumes that ANI will actually push through with the SRO on these terms, which might be misplaced confidence in a company that has already amended this very offer several times without appearing to make material headway in actually getting these shares sold and listed. Wait and see? That’s about all ANI investors can do.

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