New Zealand DAIRY INVESTMENT – NZ$500,000 – Budgeted returns approx 9.0% (pre-tax on Capital)
Expressions of interest are invited, from suitably qualified investors, for investment parcels of $500,000 (with $50,000 increments) in this established, fully managed, Murchison (West Coast, New Zealand) dairy farm. Projected average pre-tax returns on capital invested of 9.0% (for first 3 yrs, based upon a Fonterra payout of $6.50).
This a large, established dairy farm of approximately 1400 hectares situated at the South Branch of the Tutaki Valley, Murchison, New Zealand. It has a proven production track record and an ability to increase production levels further.The company that currently leases and manages the farm has already entered into a conditional Sale and Purchase Agreement to purchase the farm for $17,800,000. This price is equal to $29.67 per kg milk solids, based on an annual production of 600,000 kg milk solids as forecast for the 2011/12 year. The total assets are estimated to be worth $26.4m, comprising of the farm property, cows, plant and Fonterra shares, providing the Company with a strong security base. It is intended to have Bank debt at $8.0M which will equal approximately 28.6% of total assets.
Average Returns
(projected first 3 years at $6.50/kgMs)
On Total Assets 7.6%
On Capital Invested
(before-tax) 9.0%
(after-tax) 6.5%
Debt/Total Assets 27.4%
Key Offer Details
Issuer: Melco Investments Limited
New Ordinary Shares: 16,000,000
Issue Price: $1.00
Offer Closing Date: 14 November 2011
Shares Already Comitted: 3,000,000
Dividend Payment Frequency:6 Monthly
Key Investment Features
- Melco, a private unlisted New Zealand Company.
- Indirect investment in the $10 Bn Food Production & Dairy Industry.
- Mt Ella Station, a 1,398 ha dairy farm inNew Zealand’sSouth Island.
- Operating over 10 years, Mt Ella is a well managed farm with a proven production track record.
- Lower than average cost structure in an area of reliable rainfall.
- Conservative bank debt at less than 30% of total assets.
- The offer is to purchase 16,000,000 new shares in Melco.
“The Directors believe this is an excellent opportunity to be involved in an industry that is performing well off the back of strong global commodity prices that are expected to be maintained because of the world-wide protein shortage. An investment in *Melco will provide investors with the prospect of cash returns and capital growth potential in the shares.”
Chris Dawkins – Chairman (Melco Investments Limited
We are seeking expressions of interest from suitably qualified professional investors able to meet the application criteria as defined by the New Zealand Securities Act 1978 and described in more detail in the Information Memorandum.
NOTE: Overseas investors are required to comply with New Zealand Securities Laws as well as any applicable laws relating to securities or investments in your own country. You should obtain your own legal advice in this respect.
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