RFM RiverBank

Fund Overview
Fund Assets
Fund Benefits
Performance & Financial Information
Unit Prices
Distributions
Redemptions

 

RiverBank Capital Raising / Rights Issue

RFM is pleased to announce the release of a new Product Disclosure Statement (PDS) for RFM RiverBank ARSN 112 951 578 dated 19 October 2009 and Supplementary PDS dated 17 February 2010. The Offer was open to Existing Unitholders for 3 weeks from 19 October 2009 to 6 November 2009. The Offer has now been open to the public since 9 November 2009 and will close 30 April 2010 or earlier if RiverBank is oversubscribed.

Please click on Offer Documents under Key Documents to download a copy of the PDS and Supplementary PDS along with related research and marketing materials.

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RiverBank Unitholder Notice of Meeting

RFM has issued a RiverBank Notice of Meeting dated 26 February 2010 for a meeting of Unitholders to be held on 25 March 2010. The meeting has been convened to consider the redemption of RiverBank units owned by its largest unitholder, the RFM Diversified Agribusiness Fund (DAF) ARSN 099 573 627. It is proposed to redeem 25.5 million RiverBank units owned by DAF at a 52% discount to Net Asset Value as at 31 December 2009.

Proceeds from this redemption will, in turn, be used to redeem units owned in DAF by Great Southern Ltd (GSL) (Administrators appointed) (Receivers and Managers appointed). Agreement has been reached with the GSL Receivers to redeem their DAF units at a 54% discount to Net Asset Value as at 31 December 2009.

This redemption requires Unitholder approval and is one step, in a series of steps, designed to restructure and recapitalise RiverBank.

Please click on Notice of Meeting under Key Documents to download a copy of the documents including an Explanatory Memorandum.

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Fund Overview

RFM RiverBank (RBK) aims to provide investors with competitive risk-adjusted returns through select investments in land, infrastructure and water assets. An investment in RBK seeks to provide a reliable tax efficient income stream and the potential for capital growth through the acquisition and long term leasing of land and water assets. Irrigation entitlements are a specific focus of the RBK investment philosophy. RBK was established in February 2005 to acquire land and water assets in rural and regional Australia and lease these assets to selected counterparties.

Returns generated by RBK are a combination of regular lease payments and capital growth resulting from increases in asset values.

Table 1: RBK Summary
RFM RiverBank (ARSN: 112 951 578)
Status Open
APIR RFM0002AU
Date of Inception February 2005
Suggested Investment Time Frame 5+ years
Risk Profile Moderate to High
Investment Objective RBK is a unit trust designed to own land and water assets in rural and regional Australia. RBK does not undertake farming activities on its own accord; rather it leases assets to third parties.
Minimum Initial Investment $10,000 (for new investors)
Minimum Additional Investment $1,000
Indirect Cost Ratio1 2009 -2.66%
Income Distribution Quarterly
Liquidity RBK is considered a non liquid managed investment scheme, and there is no established market for the sale of Units. RFM intends to offer an annual redemption offer commencing in 2011.
Responsible Entity Rural Funds Management Limited

1 The Indirect Cost Ratio is expressed as a percentage of the net asset value of the Fund. This includes GST reduced by the estimated Reduced Input Tax Credits. Refer to the Product Disclosure Statement for details of fees and costs.

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Fund Assets

RBK is a unit trust which primarily invests in horticultural land, water and infrastructure. RBK generally does not undertake farming activities on its own accord; rather it leases assets to third parties. Consequently, although the nature of the assets owned by RBK is agricultural, the income generated by RBK for its investors is dependent upon lease payments rather than agricultural commodity cycles. The majority of the RBK assets are leased to a Great Southern Limited (GSL) entity who has defaulted on their obligations under the lease agreements. Transactions detailed in the PDS describe the process for replacing the GSL entity counterpart. In addition, RBK leases similar assets to the RFM Almond Fund 2006 and owns 1,000 megalitres of high-security water entitlements on the Murray River which it leases to Barossa Infrastructure Limited in South Australia under a ten-year agreement.

RBK's main assets are almond orchards situated on two properties near Hillston, 100 kilometres north of Griffith, NSW. One property is owned by RBK, whilst the other is secured under a long term lease arrangementd is currently planned for acquisition by RBK (detailed in the PDS). These assets include the land, almond trees, and irrigation infrastructure and extraction rights to bore water from the Lower Lachlan Aquifer.

RBK is unique: whilst it owns assets that are primarily agribusiness in nature, due to the nature of its business, it is not directly exposed to the various risks inherent in managing an agricultural enterprise.

RBK intends to continue acquiring water entitlements in the future, as and when suitable counterparties are identified. RBK will also look at acquiring additional combined land and water packages to be leased to appropriate third parties.

Table 2: RBK Assets
RFM RiverBank as at 30 June 2009
Units on Issue 35,395,850
Total Assets $62.4m
Net Assets $42.4m

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Fund Benefits

  • Capital Growth: Land and water assets have the potential to appreciate in value, particularly when coupled with quality developments.

  • Unique asset class: Investing in RBK provides exposure to the newly developing water market. The importance and value of water is set to increase as the market expands and matures.

  • Lease term: Almond trees have a productive life of up to 35 years. Following the expiration of the leases in 2027 and 2028, the proceeds from the almond crop reverts to RiverBank Unitholders.

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Performance & Financial Information

RBK has delivered consistent, positive returns to Unit Holders over the past three years despite widespread drought in southern Australia.

Table 3: RBK Financial Year Returns
Financial Year Returns 2009 2008 2007 2006
Distribution 5.76% 9.21% 7.83% 0.00%
Growth 3.18% 14.26% -3.81% 8.25%
Total Return 8.94% 23.47% 4.02% 8.25%
Grossed Up Distribution 5.76% 11.10% 8.34% 0.00%
Grossed Up Total Return 8.94% 25.36% 4.54% 8.25%

Returns inclusive of Franking Credits.
Past performance is not a reliable indicator of future performance.

 

Table 4: RBK Rolling Annual Returns
Rolling Annual Returns
(as at 30 Jun 2009)		 1 Mth 3 Mth 6 Mth 1 Yr 2 Yr* 3 Yr* Inception*
Distribution Returns 0.00% 0.00% 1.79% 5.76% 7.40% 7.57% 5.55%
Growth Returns -4.72% -1.50% 0.14% 3.18% 8.58% 4.28% 5.15%
Total Return -4.72% -1.50% 1.94% 8.94% 15.98% 11.85% 10.70%
Grossed Up Distribution Returns 0.00% 0.00% 1.79% 5.76% 8.28% 8.32% 6.10%
Grossed Up Total Returns1 -4.72% -1.50% 1.94% 8.94% 16.86% 12.60% 11.25%

* Annualised figures.
1 Effective return including Franking Credits distributed to Unitholders.

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Unit Prices

Unit prices are quoted in Australian dollars and are calculated on the 15th day of the month or the following Business Day, if the 15th is not a Business Day. They are based on the NAV calculated using the preceding month’s financial results.

Click here for historical unit price information

Table 5: RBK Unit Price History

Due to RBK not receiving lease payments, which were due in October 2009 from its insolvent counterpart, and given RFM is not able to undertake an alternative strategy at this point in time, RFM is unable to provide a valuation for RBK units. Therefore the Unit Pricing Committee has elected not to publish a RBK unit price at this stage.

Reinvested units and units purchased via rebated trail will be issued at the most recently published unit price.

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Distributions

The historical composition of RBK's distributions since its inception is shown in the table below.

Table 6: RBK Distribution Summary since inception
Distribution Summary1
(period ending 30 June 2009)		 1 Yr 2 Yr 3 Yr Inception
Franked Portion 0% 26% 12% 12%
Unfranked Portion 51% 40% 18% 18%
Franking Credits2 0% 11% 5% 5%
Tax Deferred3 49% 22% 66% 66%

1 Figures rounded to nearest percentage.
2 Represents tax paid by RBK, or funds in which RBK has invested, which may be available to Unit Holders as a tax offset.
3 The tax deferred proportion is the percentage of the distribution which is generally not included in the Unit Holder's assessable income in the year of the distribution. These amounts may have capital gains tax implications for Unit Holders.

 

RBK distribution payments are paid quarterly (previously paid bi-annually). The change to quarterly distribution payments commenced with the 30 March 2007 Record Date distribution. Please note that distributions are taxable in the year of receipt.

Distributable income is allocated to Unit Holders on a per-Unit basis according to the number of Units held at the end of the distribution period.

Reinvested distributions will be reinvested using the NAV Price calculated on the next Unit Price set date following the distribution period.

Cash distributions will be paid to Unit Holders by the 14th of the month following the Reinvestment Date.

Table 7: RBK Distribution History
Record Date Reinvestment Date Cash Payment Date Distributions Paid
(per unit)		 Franking Credits Total
31/12/2006 28/02/2007 by 28/02/2007 $0.0400 NA NA
31/03/2007 28/05/2007 by 28/05/2007 $0.0200 NA NA
30/06/2007 30/08/2007 by 30/08/2007 $0.0200 $0.0051 $0.0251
30/09/2007 15/11/2007 by 14/12/2008 $0.0210 $0.0054 $0.0264
31/12/2007 15/01/2008 by 14/02/2008 $0.0210 $0.0054 $0.0264
31/03/2008 15/04/2008 by 14/05/2008 $0.0210 $0.0054 $0.0264
30/06/2008 15/07/2008 by 14/08/2008 $0.0210 $0.0000 $0.0210
30/09/2008 15/10/2008 by 14/11/2008 $0.0220 $0.0000 $0.0220
31/12/2008 15/01/2009 by 14/02/2009 $0.0220 $0.0000 $0.0220
31/03/2009 15/04/2009 by 14/05/2009 $0.0220 $0.0000 $0.0220

The RFM Board has resolved to suspend RBK distributions, commencing from the distribution with Record Date 30 June 2009. This is due to the uncertainty of RBK receiving the lease payments that were due in October from its major counterparty, Great Southern Managers Australia Limited (GSMAL).

RBK has approximately $3m cash available at present. However, the uncertainty surrounding the receipt of lease payment from GSMAL means that these funds may be required to meet ongoing lease obligations with Lachlan Farming Ltd and continued orchard maintenance requirements. Therefore in the interests of prudent financial management, distributions will be suspended until minimum subscriptions in the current capital raising have been met.

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Redemptions

RFM intends to make an annual withdrawal offer available commencing 2011. Each withdrawal offer will be open for acceptance for at least 21 days.

Next Redemption: Anticipated 2011.

For further details about redemptions, please refer to the Product Disclosure Statement.

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Key Documents