Dairy farm fund withdraws share offer
Pastoral Dairy Investments has withdrawn its share offer after subscriptions fell short of the minimum $25 million total sought.
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Pastoral Dairy Investments has withdrawn its share offer after subscriptions fell short of the minimum $25 million total sought.
PDI pitched its offer as a chance for New Zealanders to invest in a fund which would make investments in debt-free dairy farms.
The minimum commitment was $20,000 from retail investors, while PDI was also seeking a further $50m from co-investors, including high net worth individuals and charities.
PDI had planned to buy up to nine dairy farms mainly in the South Island to be managed by MyFarm Asset Management LP, jointly owned by MyFarm and Agri Capital Services.
The fee structure was comparable, if not more favourable, than a share-milking arrangement, the company said.
PDI spokesman Neil Craig said today that “consistently strong interest” during the offer period did not translate into applications.
“We suspect that this lack of demand is mainly due to general investor caution related to the current uncertain economic climate and a lack of familiarity with dairy farming as an asset class," he said.
“We also think that this caution has been heightened by commentary surrounding the recent softening in dairy prices.
"The board and the manager remain convinced of the merits of a dividend focused, debt-free investment in New Zealand dairy farms at this time.
"We are continuing our efforts to secure one or more large scale cornerstone investor who will provide value endorsement to the PDI opportunity and provide PDI the scale it needs to be successful.
"If this circumstance arises, the PDI Board will consider at the time whether the PDI opportunity should be ‘dusted off’ and re-offered to the public.”
PDI subscribers have been notified of the decision today and will be refunded the full value of their application payment together with any net interest to which they are entitled to.
NBR staff
Fri, 18 May 2012
Fri, 18 May 2012
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Dairy farm fund withdraws share offer
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