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- Forestry and woodfibre company Midway (MWY) receives approval from the Foreign Investment Review Board (FIRB) to sell plantation land in southwest Victoria
- Midway struck a deal with MEAG earlier this year to sell the 17,000-hectare land for $154.1 million
- The companies also agreed that MEAG will acquire an extra $200 million of land to establish greenfield hardwood plantations that Midway will source and manage over several years
- The FIRB approval was the only material condition that needed to be met and now that it’s been achieved, the sale may proceed
- Midway shares close in the grey at 91 cents
Forestry management and woodfibre export company Midway (MWY) has received approval to sell plantation land in southwest Victoria.
Earlier this year, the company announced its intention to sell the 17,000-hectare land to MEAG for $154.1 million, however, it first needed to get the green light from the Foreign Investment Review Board (FIRB).
MEAG and Midway also agreed that MEAG would acquire an additional $200 million of agricultural land in southwest Victoria to establish greenfield hardwood plantations. The land will be sourced and managed by Midway.
The FIRB approval was the only material condition that needed to be met and now that it’s been achieved, the sale may proceed.
Midway said the sale agreements will generate revenue and will secure the company with future additional volume for its processing operations at North Shore, Victoria.
“When complete, the change in ownership and control of the plantation estate will simplify the Midway balance sheet and remove annual valuation changes in biological assets that have previously created volatility in the valuation of company held assets,” Midway Managing Director Tony McKenna said in the May announcement.
Completion of the sale process will make way for related transactions including the phased repurchase over the next two years of the hardwood trees on Midway’s plantation estate as part of the sale to MEAG, the repayment of all long-term corporate debt, and the payment of a fully franked special dividend of 19.5 cents per share to Midway shareholders in the first half of 2023.
“The transaction provides significant carbon sequestration opportunities in Victoria, generates valuable carbon credits for MEAG and demonstrates a successful model for future carbon management projects by Midway with domestic and global investors,” Mr McKenna concluded today.
Midway shares closed in the grey at 91 cents.
