The Great Southern almond carve-up is set to deliver worthwhile profits to many people, but it also leaves a rump of 295 of the original MIS Great Southern almond investors wallowing in the mire.
The Hillston, NSW, Great Southern almond plantations are among the lowest cost almond producers in the world and global demand for almonds is rising because of Chinese buying. (See The decision driving Bendigo nuts, February 18.)
David Bryant of Rural Funds Management yesterday completed a coup by gaining approval to buy back the Great Southern almond lands for $15 million via equity sold to more than 120 new investors. Bryants investors has sold the almond lands to Great Southern in 2007 for $35 million via units in a fund. The buy-back was achieved via a unit redemption at a discount of more than a 50 per cent.
The plantations on the almond lands were leased to some 569 Great Southern MIS unit holders most of whom had been funded by the Bendigo Bank. Under the latest reconstruction put to them they were asked to either subscribe a further $11 million or walk away and lose their original investment. Some 274 investors (48 per cent of the total) subscribed 38 per cent of the $11 million or $4.2 million. The 274 investors will have to subscribe three more instalments but the plantations which they are leasing for 20 years will start to be to cash positive in a couple of years and they are set to make a considerable profit.
Those who could not fund the take up will be left with a debt to Bendigo Bank, which they will have to fund from their personal assets unless they can win the court cases.
To illustrate the worth the Great Southern MIS investments, the plantation leases that the MIS holders did not take up were snapped by Select Harvest, which has joined the MIS people in appointing RFM as manager of the almond areas.
Select Harvest also leased another area which currently has olive trees planted, but they will be replaced by almonds. Select harvest now has a substantial stake in the Australian almond industry and will be the biggest winner if almonds are the success that the industry is predicting.
But for David Bryant, who has bought back control of Rural Funds Management from Great Southern for $1 million or one tenth of what he sold it for the involvement with Great Southern might have been painful but it has been extraordinarily profitable. RFM now has a substantial almond management business.
BEN Price at posting:
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