In today’s uncertain economic environment, investors are seeking potential returns ahead of inflation. Our latest offer is an investment in debt financing, forecast to deliver a return of 10% p.a. over a three-year term.
There is the added bonus of potential capital upside too, with the option for investors to redeem the loan for cash or convert to equity in the partnership on redemption.
To say that avocados have had a rough 18 months would be an understatement. Disruptions in the global supply chain combined with an unforeseen drop in sales to Australia are largely responsible for reduced orchard gate returns, which hit a low of $9.9/kg a tray last year. This market turbulence has had an impact on the short-term profitability of Aupōuri Avocados LP and has led the syndicate to seek this additional investment.
The good news is that orchard gate returns are projected to recover this season to around $15 a tray, and the industry’s drive to expand new markets appears to be bearing fruit – as exports to Asia grew by over 300% last year. With younger trees reaching full maturity in the next couple of years, Aupōuri Avocados LP is forecast to return to profitability by 2025.
Here’s a summary of this investment:
- Aupōuri Avocados LP – Four Northland orchards with 23 canopy hectares of maturing, intensively-planted avocado trees.
- Aupōuri Avocados LP is seeking $3.21 million as convertible three-year Loan Notes returning 10% per annum.
- Current investors have already taken up investments of almost $2 million in the offer, leaving just over $1m of Loan Notes for investment.
- Interest will be paid quarterly in arrears with the first payment on 31st December 2022.
- The loan will be used to reduce bank debt, fund cashflow until the forecast breakeven point in FY25, and upgrade irrigation systems.
- The Loan Notes are proposed to be secured by the four orchards and rank behind bank debt and with priority over other creditors.
- Investors will have the option to redeem their Loan Notes for cash or convert to equity at redemption. This provides potential for capital upside.
This offer is now fully subscribed.
* This offer is open to persons who fall within the exclusions applicable to offers made to "wholesale investors" as set out in Schedule 1, clauses 3(2)(a)-(c) and 3(3)(a)-(b)(ii) inclusive of the Financial Markets Conduct Act 2013 (FMCA). You can obtain further information on FMCA requirements, and whether you come within the exclusions and their requirements at www.myfarm.co.nz/can-i-invest
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