Feihe International's Rough Financial Position

Sean Wright submits:

We never want to rely on the kindness of strangers in order to meet tomorrows obligations.
~ Warren Buffett

Synopsis

ADY has serious financial problems. The company is heavily indebted, yet has a history of producing negative cash flow and no immediate prospects for operating improvements. It is highly questionable whether or not ADY should be considered a going concern. ADY is relying on the kindness of its PRC bankers to remain alive at the moment, but with huge near term payment commitments, this kindness will be tested. In order to survive long term, I believe ADY will need to raise at least an additional $100m in equity capital.

Yet, ADY is a Chinese RTO that has already burned through three other private equity funds money, has negative cash flow, has no proper CFO, and after over five years as a public company in the USA (including a stretch of


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