The New Zealand Rural Land Company has raised nearly $10.5million under an institutional entitlement offer as part of a capital-raise to fund a $63.7million purchase of a Manawatu-Whanganui forestry estate.
In a statement yesterday, the company — which owns more than 5300ha of land in Otago and Southland — said it had successfully completed the institutional entitlement offer component of its 1:3 pro-rata rights issue with a 100% participation rate and a large subscription for any potential shortfall.
A retail entitlement offer would open on Monday and close on March 15.
Earlier this week, the company announced a $5.3million net profit (after tax) for the year ended December 2022.
The results covered the period July 1, 2022-December 31, 2022, following a change in their balance date from June 30 to December 31.
New Zealand Rural Land Company owns 11,710ha of rural land, which is fully tenanted on long-term leases, generating shareholder value through a combination of asset value appreciation and cash flows from its long-term leases.
The portfolio increased in value by 0.94% in the six months to December 2022, which the company said reflected the resilience and quality of its portfolio in an uncertain macroeconomic environment which was putting downward pressure on the value of many other assets.
Earlier this year, the company held presentations in Europe promoting the company as "one of the only ways" overseas investors could be exposed to New Zealand agricultural land.
It recently announced it had implemented a dual listing on the Frankfurt Exchange, after requests from potential European investors. It listed on the NZX in December 2020.
In October last year, it announced it had entered into an agreement to acquire up to 100% of a North Island forestry estate. The estate comprised five individual properties with a total area of about 2383ha.
The cost to acquire 100% of the estate was about $63.7million (subject to final costs), with a settlement date of April 15 this year. The entire estate would be leased to New Zealand Forest Leasing for a period of 20 years.
At the time of announcing the acquisition, NZ Rural Land Company said the purchase would be funded through a combination of debt and equity.
They would pay a half-year dividend of 2.03cps for the period July 1-December 31 2022, an increase of 27% on the previous six-month period (January 1 2022-June 30 2022).
The company’s properties were unaffected by the series of extreme weather events in the last month and the forestry acquisition was also unscathed.
The outlook for the company looked "extremely positive", chairman Rob Campbell said in a statement.
