For a $2 million investment, a new partner would get a 25% stake in the business as a going concern. This would replace bank debt with equity to enable stronger cashflow performance and the ability to take advantage of future capital and productive growth opportunities.
The business shares include land and buildings, 345,615 Fonterra shares, 800 mixed-age cows and replacement stock, and plant and equipment.
Key features of the property north of Cheviot are its low-cost production system and reliable water resource and delivery. PPL is able to grow pasture cost-effectively because of a base of fertile silt loam soils, coupled with water sourced from the alpine-fed Waiau River.
It has established the private Phoebe Irrigation water scheme which now delivers 6mm a day of water to 219ha. This means the farm has full control of its water infrastructure and annual water charges, which are based on usage and not levied as a fixed cost on the irrigated area. During the past few years the total cost of water delivery from the source to the soil has been between $250 and $300/ha, including plant replacement and capital expenses. This shows significant cost control and savings compared to other irrigation schemes in Canterbury.
Shareholders have good historic performance data and a solid group of professionals behind them. Full valuation reports, financial forecasts, land purchase contracts and due diligence information is available on request.
PPL has a strong existing governance structure, with each shareholder appointing one director to the board, and it is expected an incoming shareholder would also appoint one or two directors. The board meets at the annual meeting, but also as required to discuss significant governance issues, with significant communication between directors and shareholders.
Expressions of interest are invited from investors – both passive and those seeing an equity management opportunity. For further information contact Richard O’Sullivan, Colliers Rural and Agribusiness, on 0272 923 921 or Ruth Hodges on 0273 090 334.
