“It was just a matter of seeing it through to completion, so ... it was very straightforward,” Milsom said.
The only unforeseen event between going unconditional and completing the purchase was the arrival of Cyclone Gabrielle but Milsom was relieved to find out the land had been mostly unscathed by the storm.
“We’re insured and weather events are something we compensate for, it was just a pleasant surprise that they were largely unscathed,” he said.
The purchase was funded with a combination of debt and equity, with debt provided through a green loan of $25.2m from Rabobank.
Equity was funded from the proceeds of NZL’s recent capital raise offer and proceeds of a $12m convertible bond issued to an entity associated with NZL.
Milsom said the loan from Rabobank was approved because the companies shared similar sustainability goals, so it was a matter of marrying the two companies’ frameworks.
The loan also established a green financing framework, setting out eligible asset classes for investment and how proceeds from the loan will be used, managed and reported on.
The entire estate has already been leased to New Zealand Forest Leasing (NZFL) for a period of 20 years.
The land will be used either for carbon credit farming or for timber, depending on what makes the most sense for the tenant, Milsom said.
He said it was a particularly important purchase for the company as it diversified its portfolio in terms of asset type, location, tenant and lease.
“It’s a very significant purchase for us.”
Previous to this, NZL had only acquired pastoral farmland on the South Island.
Milsom didn’t confirm if the company would look to make further acquisitions in the region as it assesses each purchase case by case, but it was a possibility.
“We like the region and we like the asset class so it’s entirely possible.”
