RFM, as responsible entity of the Rural Funds Group (ASX: RFF) has announced a fully underwritten, 2 for 13 non-renounceable Entitlement Offer for all eligible investors to fund the acquisition of two properties and associated water entitlements in the NSW Riverina district.
The properties will be developed into a 1,500 hectare almond orchard under a lease agreement with tenants Olam Orchards Australia Pty Ltd.
RFM, as manager of RFF, has already secured an initial $12.6m through 11.5m new unit Placement to institutional investors.
After a two-day trading halt late last week, the manager launched an Entitlement Offer for all eligible RFF investors.
Existing investors will be offered the opportunity to partake in the 20.4 million new units to be issued in the 2 for 13 non-renounceable Entitlement Offer which will raise $22.4m.
Wilson HTM and Bell Potter are the joint lead managers and underwriters of the raising.
The acquisition comes after RFM signed a 22year lease with Olam Orchards Australia Pty Ltd to develop and operate an almond orchard on the properties, called ‘Kerarbury’ and ‘Kamelda’.
The properties are located near Darlington point in the Riverina, NSW, where RFF already owns several assets, and is suitable for a further expansion of up to 1,000 hectares of almonds in the future. The surplus land is also suitable for irrigated cropping and grazing.
The acquisition is RFF’s second major acquisition since listing in 2014 and follows the purchase of a similar Riverina property ‘Tocabil’, which is currently leased and under development by Olam.