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PrimeAg may pass into foreign hands
MATTHEW CRANSTON
10 Sep, 2012 09:45 AM
PRIMEAG Australia's property port­folio could join Cubbie Station in passing into foreign hands, as the listed agriculture group inches closer to a full sale of its rural property and water assets.

The Australian Financial Review reports that as the debate about Chinese investment in Australian agriculture continues, PrimeAg is in the process of appointing advisers to sell its assets.

Potential buyers could include companies such as Shandong Ruyi (which makes up 80 per cent of the consortium poised to buy Cubbie Station for more than $200 million) and pension funds such as TIAA-CREF and the $163 billion Canada Pension Plan Investment Board.

PrimeAg's net asset value is about $425 million or $1.58 a share. But if there are no offers above $1.30, the portfolio could be sold off piecemeal, in a similar fashion to the drawn-out sale of Clyde Agriculture's $300 million rural land portfolio.

Major shareholder Australian Food & Fibre is calling for a quick sale process and cash return.

While the pressure is on PrimeAg to return value to shareholders, selling over a dozen aggregated properties stretching from the Liverpool Plains of NSW to central Queensland could be challenging.

In a key test for the market, earlier this year PrimeAg sold six farming properties for $36.7 million to the $US487 billion United States-based TIAA-CREF.

PrimeAg chairman Roger Corbett confirmed that advisers were being appointed to lead a sale process.

"PrimeAg's assets are unique. They have an entirely different profile to Clyde," Mr Corbett said.

"There is no debt here – just properties and cash."

After a recent revaluation of four properties, the value of the company's assets increased by $5.7 million, including a $2.6 million reversal of an earlier impairment and a $3.1 million increase in book value.

Mr Corbett said that the sale of PrimeAg assets would not be a distraction from the operations of the separate newly created rural property fund. "The process of assessing acquisitions for that fund is ­ongoing," Mr Corbett said.

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