Total Issue: 8,923,181
Market Capitalisation: $4,550,822 (@51c)
28/01/16 excerpt from Half Yearly report:
"I am pleased to report an after tax profit of $338,802 for the half year to December. This was due to the marking to market our Namoi Cotton Capital Units stake to 33.5 cents per unit which in effect reversed the previous mark to market valuation to 29 cents per unit. The current unit price for Namoi now reflects the approximate cost of this investment to ARC and along with our cash balance gives rise to an asset backing of 51 cents per share for ARC.
We believe this is a positive outcome in a period of significant market volatility and negative returns. Our asset backing has remained stable, which highlights our approach, which remains focused on both on capital preservation and investment returns, both aspects which are fundamental to our value approach of investing."
"Australian Rural Capital, backed by agribusiness and investment heavyweights James Jackson and Stephen Chapman, has emerged as Shanghai Pengxin’s bidding partner for the S. Kidman & Co pastoral empire.
Shanghai Pengxin, controlled by property billionaire Jiang Zhaobai, is the frontrunner in the race for the sprawling cattle station portfolio, the largest in the world.
The asx-listed ARC will today announce its intention to take a significant stake in the Kidman portfolio if Shanghai Pengxin is successful in the bid, which has priced the properties at more than $370 million.
The size of the landholding was one reason Scott Morrison cited when the Treasurer knocked back Shanghai Pengxin’s earlier attempt to take sole control of the properties.
The Chinese conglomerate is in a tight race for the Kidman empire, which covers more than 11 million hectares and runs almost 200,000 cattle, with Hong Kong fund Genius Link Asset Management.
It is expected the entry of Mr Jackson and Mr Chapman, who control 18.6 per cent and 13.7 per cent of ARC respectively, could allay some concerns raised by the Foreign Investment Review Board, which has already excluded the largest property — Anna Creek — from the bid.
Mr Jackson has been a stalwart of the Australian agricultural sector. He is currently deputy chairman of Elders and was an executive with investment bank SG Warburg in New York and a director for MSF Sugar.
Mr Chapman, a merchant banker, is chairman of corporate advisory firm Baron Partners and deputy chairman of vitamin manufacturer Blackmores, and was deputy chairman at Perpetual.
ARC is in the process of seeking to raise up to $100m as part of a wholesale unlisted fund, which will then be listed on the asx.
The Australian understands ARC will take a material stake if successful as co-bidder, potentially more than 20 per cent.
It had previously suggested it was considering investments in portfolios with between five and 10 holdings, taking a stake of between 10 per cent and 50 per cent. But the Shanghai Pengxin bid, even with the support of ARC, could still find itself competing intensely with GLAM, which owns a number of agribusiness assets in Australia, including Riverina Oils & Bio Energy, a substantial oilseed producer.
GLAM suggested it is also open to other, larger opportunities, and could make equity investments in the Consolidated Pastoral Company or the Australian Agricultural Company.
Transportation tsar Lindsay Fox has also expressed interest in the Kidman portfolio, with the sale process being run by Ernst & Young.
Deputy Prime Minister Barnaby Joyce earlier urged local investors to “understand the value being placed on Australia’s agricultural assets by foreign investors”.
Once a final bid is approved by FIRB and lodged with the Australian Securities & Investments Commission, rival bidders will have four weeks to lob a higher offer.
That could still give domestic bidders who had previously expressed interest, including FK Gardner & Sons and Victor Smorgon Group, the time to consider another run at the portfolio."
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Please dyor and due dilligence........ Good Luck!
Cheers tela
ARC Price at posting:
51.0¢ Sentiment: Buy Disclosure: Held
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