Ann: Appendix 4C - quarterly, page-8

Yes, they have mentioned that in the past in passing but also they now mention they want to convert them to organic. Which one is it? Loose talk to be honest as they don't know which way is up.

The farms have secured debt hanging over them of $10m to the Commonwealth Bank and they have not release any revaluation of the farms in well over a year. So if they sell the farms and bio-stock then it is goodbye organic strategy and they go backwards to being a contract processor. Selling the farms would do three things: (1) leave them with a very light balance sheet and still not move the cash flow into a positive position with the removed debt servicing; (2) force them to buy milk on the wholesale milk market and with the now absence of Murray Goulburn Cooperative the milk swaps market may well dry up as various other processors seek to secure the more milk and they just lost, but undisclosed, their arrangement with ODFC which is the largest supplier of organic milk in Victoria; and (3) it is now the revenue generated from the farms by way of milk sales that prevents this company from going into insolvency.

Now, as you say, if they did move the farms into yet another trust the debt would follow unless they refinance elsewhere or raise some more capital to remove the debt and then the Trust would have more costs associated to it, highly likely through Michael Hackett's Jimmy Choo Choo company, and AHF would be even worse off no matter what milk supply arrangement they try and put in place whether it be some sort of off-take agreement (cough cough) or a long term supply agreement (see ACCC Dairy Inquiry final Report as to how that might work or not work).

Either way selling the farms to themselves or someone else would be akin to commercial euthanasia.

As for being well experienced in the dairy industry, I do question this. They may well have a few good men and women in the processing plant and on the farms but the overall company stewardship is remiss of any breadth or depth of dairy capability or steering a listed company for that matter if the growth or yield values to date are any measure to go by and the strategy is completely all over the floor as it has been since late 2015 when they ventured into the CDC acquisition.

Safe hands? Yup, sure....their hands your pockets.