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RFF raises A$7.5m towards orchard development in unit sale

Rural Funds Group, the ASX-listed farmland REIT, raised the capital through a placement with new and existing investors. It also launched a $7.5m entitlement offer for existing investors.

Listed Australian farmland REIT Rural Funds Group (RFF) has raised A$7.5 million ($5.7 million; €5.4 million) through the issue of new stock to new and existing institutional and sophisticated investors. The trust has also launched a further A$7.5 million capital raise through the issue of new stock to existing investors in an entitlement offer.

The news comes in the wake of the REIT’s recent leasing deal with Olam Orchards, which will require A$27 million in development capital for the 600 hectares of greenfield orchard land leased to the agribusiness.

The 7.13 million stapled securities placement was handled by Wilson HTM Corporate Finance as lead manager and sole bookrunner. Units were sold at A$1.05 each, a 0.9% discount to the closing price on 5 March when the deal was announced on the Australian securities exchange (ASX). Wilson HTM is also the underwriter of the entitlement offer which will issue two new units for every 33 existing units owned, at A$1.05 each, a 1.9 percent discount to the theoretical ex-rights price. The entitlement offer closes on 1 April.

The capital raise coincided with the selldown of 7 million existing stapled securities “in response to significant demand from institutional investors”, according to the announcement.

“The Board is delighted with the response to the institutional placement. It demonstrates the confidence of our investors and the wider market in Rural Funds Groups, and the strengthened dynamics of the Australian almond industry,” said David Bryant, managing director of Rural Funds Management, the REIT’s manager, in a release.

RFF owns a diversified portfolio of high quality Australian agricultural assets. It became Australia’s first listed diversified agricultural property trust on ASX in February 2014.