Ann: Termination of Pedra Branca Dairy Farm Lease, page-7

The ASX announcement on 8 Sep 15 regarding the purchase and leaseback of the farm stated:

"In line with the Prospectus the Pedra Branca farm property has been leased to Grasslands Dairy Co Pty Ltd (a wholly owned subsidiary of Doman Agricultural Investments Pty Ltd) for a term of ten years, with five yearly rights of extension for a further 15 years. The initial annual rental is based on 9.5% of the fair market value. The dairy farms will be owned and managed within BFC’s subsidiary company, Beston Farms Pty Ltd, which holds all the group’s dairy and farm interests. Farm ownership is a key part of BFC’s strategy and its integrated closed loop supply chain. The milk produced by the farms will be supplied to BFC’s wholly owned dairy processing facilities at Murray Bridge, now known as Beston Pure Foods, which makes cheeses and by-products, cream and whey."

So the lease provided a 9.5% return and supply of milk. Now the lease is terminated. Don't think it is good. Leases are not usually terminated except by agreement or if the tenant defaults or the tenant goes bust and the tenant's liquidator disclaims the lease. None of these sound good.