WELLINGTON - Tasman Agriculture, the country's largest private dairy farmer, says it will sell all its New Zealand farms and pass some of the cash back to investors through a share "buyback."
The company, 66 per cent-owned by Brierley Investments, has already sold some of its smaller farms from a portfolio
of 73.
It will start next dairying season with 64 NZ farms and 23 in Tasmania.
For more than a year the company's share price has lagged well below the per-share value of its net tangible assets, including farmland and buildings.
Directors see the sell-off as the best way to free up capital for shareholders and the buyback will return $30.8 million.
It will offer 120c a share, buying on a pro-rata basis of one share for every five held. Tasman shares have been stuck at 80c each, or less, for over a year.
Late last year, the company's net tangible assets were estimated at 135c per share.
"Underlying the proposal is a recognition by Tasman Agriculture that the value of the company's substantial New Zealand agricultural assets is not at present reflected in the company's share price," said company chairman Chris Alpe.
Tasman wants to focus on managing farms for others and will also set up a development company advising on the conversion of meat and wool farms into dairying.
But it will also establish a finance company to offer loans to purchasers of its farms.
The company's strategic direction appears to have opened up to major change with the announcement last August that its net profit fell 25 per cent to $9.21 million for the May year.
It said at the time that its sales revenue was up 21 per cent at $38.99 million and earnings, before interest and tax, were up at $14.06 million from $9.97 million.
That increase was largely attributed to increases in milk-solids production and payout in both New Zealand and Tasmania.
However, Tasman Agriculture's performance did not please many shareholders.
- NZPA
