- Rural Funds Group has sold its poultry assets to ProTen Investments for $72 million
- The company plans on purchasing three WA cattle properties which have the potential to improve carrying capacity
- These properties will be leased to Stone Axe Pastoral Company, for nearly $23 million
- Settlement is expected to occur by April next year
- Rural Funds is up 2.25 per cent and is selling shares for $1.82 each
Rural Funds Group has sold it poultry assets to ProTen Investment for $72 million.
Rural Funds owns 17 broiler chicken farms, however the company plans on purchasing cattle properties instead.
RFM (Rural Funds Management) has determined that continued investment in this sector is better suited to businesses with greater economies of scale.
ProTen is a specialist developer and operator of broiler chicken farms and has a significant industry presence, particularly in the Griffith region of New South Wales.
Majority of Rural Funds Management Poultry (RFP) assets are based in Griffith.
For this transaction to go through, RFP unit holders and the lessee and operator of the farms will need to approve it. A notice of the meeting will be sent out to RFP unit holders in the coming days.
Funds from the sale will be used to buy three cattle properties in Western Australia.
RFM has entered into options to purchase the Petro, High Hill and Willara cattle properties for $22.6 million.
They are located between 200 kilometres to 280 kilometres north of Perth.
The WA cattle properties will be leased to Stone Axe Pastoral Company (SAP). It will also allow SAP to expand their wagyu beef operations.
“Consistent with other cattle properties acquired by Rural Funds, the WA properties have the potential to improve carrying capacity through grazing area development and additional irrigation,” the company stated.
Leases for the properties will include a 10 year term with a rent review on the fifth year. The company expects settlement to occur in April 2020.
Rural Funds is up 2.25 per cent on the Australian Securities Exchange and is selling shares for $1.82 apiece at 1:40 pm AEDT.