China Green Agriculture looks to raise $20M

Xi’an, China-based China Green Agriculture said today it's planning to sell nearly 1.3 million shares of its common stock at $15.60 per share to raise about $20 million in gross proceeds.

The company (AMEX:CGA) produces and distributes humic acid-based liquid compound fertilizer in China, through its subsidiary. The net proceeds are expected to be used for working capital purposes.

The firm markets its more than 130 different fertilizer products to private wholesalers and retailers of agricultural farm products in 21 provinces, four autonomous regions, and three municipal cities in China.

It also owns and operates a 137,000-square-meter research and development facility as well as a 47,000-square-meter production facility in China.

The company said it is looking to take advantage of the green fertilizer market, which is growing in China due to deteriorating land quality from harsh chemicals, the growing population, limited per capita arable land, and global warming.

The shares are being sold under China Green Agriculture’s previously filed shelf registration statement. U.S. investment bank Rodman & Renshaw is serving as the exclusive placement agent, and may place an additional more than 320,500 shares at $15.60 per share within 30 days, if investors are willing to buy more shares than initially offered.

The sustainable fertilizer manufacturer went public in the first quarter of 2009 (see Clean technology venture investment falls to $1 billion in 1Q09 and Sun rises on cleantech hotspot in Norway).

During the last couple years, many Chinese companies have turned to the public market for new capital (see The real story on cleantech in China).

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