Farms sold to listed rural investor
NZX-listed Rural Land Company has agreed to buy 14 dairy farms from the Van Leeuwen Group for $114 million.
The agreement was announced on the stock exchange yesterday.
The Van Leeuwen Group was placed into receivership earlier this week by Calibre Partners but will lease back the farms after settlement through three different companies. The lease arrangement is worth $5.8m a year, with an 11-year term and two 12-year rights of renewal. The transaction is due to be settled on June 1.
Earlier this week, a company spokesman referred all comments to Calibre Partners and said the company was still profitable. The receivers have been reported as saying the business had capital structure issues.
Van Leeuwen Dairy Group was started by Aad and Wilma van Leeuwen, who arrived in New Zealand in the early 1990s and built up a 600-hectare farm south of Timaru, installing robotic milking machines and eventually added a number of satellite dairy and drystock farms.
The sale is conditional on shareholders’ approval and a special meeting will be held in the next fortnight.
It is also conditional on the termination of the receiver by the lender and the Van Leeuwen Group entering into new finance agreements for one of its dairy assets and livestock, and its cooperation with the lender and receiver.
The contagious cattle disease Mycoplasma bovis (M bovis) was first detected on a South Canterbury farm owed by the Van Leeuwen Group in 2017.
In 2020, it won a significant High Court victory to gain more compensation than it had been paid to help pay for professional consultancy, bank charges and assorted other costs.
Rural Land Company has spent four months doing due diligence on the properties and managers, and said it considered the farms an attractive purchase. The company has plans to own large tracts of rural land.
The farms in South Canterbury and North Otago total about 6350 hectares and are a mixture of seasonal supply pastoral dairy farms, hybrid grass-based grazing, and cut and carry winter barn farms, and dairy support blocks.
Two additional dairy blocks could be acquired if conditions are met to satisfy the Van Leeuwen Group’s lender that its loan would be settled.
NZX-listed Allied Farmers Ltd, a 50 per cent shareholder in Rural Land’s management company, welcomed the announcement of the conditional agreements.
Rural Land purchased a 456ha dairy farm in Southland for $10.4m in March.
Rural Land’s share price was $1.19 yesterday afternoon, up 5.3 per cent overnight, while Allied Farmers’ share price rose 7.14 per cent to reach 60 cents.