New Zealand Rural Land Company investors are being offered a one-for-three shares pro-rata rights issue to raise $38.5 million to help buy $64m worth of forest estates.
The offer is at $1 for every new share, a slight discount on the most-recent share market price of $1.05.
An optional three-for-one warrant issue at $1.20 to exercise before November 30, 2025 is also attached to the offer.
The rights offer was announced along with NZ Rural Land Company’s (NZL) results for the financial year ended December 31, a six-month period because of a change in balance date.
The young company made a net profit after tax of $5.3m, along with a small increase in the value of its property portfolio, consisting of 11,710ha of high quality productive rural land.
The net asset value of the company is steady on $1.65 a share and the number of shares on issue, to which the rights offer now applies, is 115m.
A dividend of 2.03c will be paid on March 10 and the company has issued guidance of a 4c-4.5c dividend in FY2023 and 5c-5.5c in FY2024.
The new offer is open to institutional investors already and will open to retail investors on Monday, March 6.
In addition, $25m will be borrowed through Rabobank for the forestry purchase and NZL said it has investor interest in Europe should shareholders not wish to take up their rights.
The big forestry purchase was first announced as unconditional in October, needs to be settled on April 15, and is for five properties in Manawatū-Whanganui totalling 2383ha.
When purchased by NZL they will be leased back to the seller, New Zealand Forest Leasing, for 20 years.
NZL leases contain regular, uncapped rental reviews according to the consumer price index and it is therefore possible for the company to forecast its future earnings with some certainty.
