The Van Leeuwen Dairy Group was placed under curatorship last week. It plans to use a sale & leaseback construction to amend this situation.
The Van Leeuwen Dairy Group, New Zealand’s biggest dairy company, will sell 14 farms on 6,350 hectares to the New Zealand Rural Land Company (NZRLC).
Photo: Van Leeuwen Group
The NZRLC will pay around €68 million in this transaction. It will lease the 14 farms back to the Van Leeuwen Dairy Group for almost €3,5 million a year. The lease’s term will end in 11 years and it can be renewed twice, each for a period of 12 years.
One of the conditions of this sale & leaseback agreement is that the curatorship under which the Van Leeuwen Dairy Group was placed last week will be suspended. To end the curatorship, the Van Leeuwen Dairy Group will have to make new agreements with Calibre Partners. NZRLC shareholders also need to approve the purchase of the dairy farms. Shareholder Allied Farmers Limited, which owns 50% of the company, is very positive about the acquisition.
The dairy farms will be leased back to the Van Leeuwen Dairy Group through 3 new companies: 3 farms will operate under Sustainable Grass Dairy Limited, 5 will be leased to Performance Dairy Limited, and 6 to Performance Livestock Limited.
The NZRLC says it investigated the 14 dairy farms for 4 months and concluded that the purchase was very lucrative. The sale will take place on 1 June. In the future, the NZRLC wants to focus more on acquiring dairy farms.