The company will buy 50% stake in a yet to be established entity, New Zealand Rural Land Management Limited Partnership (NZRLM).
NZRLM will hold the external management contract to provide management services to the New Zealand Rural Land Company Limited (NZRLC). NZRLC is a newly formed entity that will acquire rural land under a landlord model. Underlying rural land will be leased to high quality farming operators.
NZRLC is intending to launch an Initial Public Offering (IPO) next month of up to $150 million and list on the NZX Main Board in December 2020.
Allied Farmers is issuing up to 5,000,000 new ordinary shares at 50c/share to fund the acquisition.
Allied Farmers chair Richard Perry says this is an incredibly exciting and pivotal opportunity for the company.
“Our strategy is to be the major solution provider to agricultural producers, growing value for those producers and our investors,” he says.
“Our NZ Farmers Livestock subsidiary is the foundation upon which we have built and delivered that strategy, and this investment enables diversification in a manner that is complementary to our core values and activities.
“We know there is compelling long-term value in owning rural land, and we can see the benefits for farm operators wishing to expand their operational platforms in a capital efficient manner. NZRLC will be a capital providing partner for New Zealand’s highly skilled and productive food producers”.
Perry notes that the number of shares to be issued depends on whether shareholder approval is obtained for the placement.
In any event it will not be more than 20% of ALF’s shares on issue. If Allied Farmers cannot issue shares, a proportion of the purchase price may be paid in cash.
