Seeka has announced the sale and lease back of approximately 100ha of its Australian kiwifruit orchard portfolio has been approved by the Australian Foreign Investment Review Board.
Located at Bunbartha in Victoria’s Goulburn Valley, the orchard land will be sold for A$26.5m, with settlement scheduled for 15 December (2020).
The funds from the sale will be used to continue the investment in Seeka’s Australian orchard portfolio and to reduce overall debt.
Seeka, which is listed on New Zealand’s stock exchange (NZX), has advised shareholders that its current year earnings guidance is for a profit before tax of between NZ$15m and NZ$17m, up from the previous guidance of between NZ$9m and NZ$12m.
“Seeka has concentrated on its core business operations and the growing parts of its business as well as focussing on cost management after a challenging Covid-19 and drought impacted harvest,” said Seeka's chief executive, Michael Franks.
“In spite of these challenges with an estimated impact of NZ$10m, Seeka’s operational earnings are ahead of 2019. Seeka did not receive any government wage subsidy.”
The Australian sale and lease back continues Seeka’s focus on reducing debt, with net bank debt expected to be between NZ$75m and NZ$85m by 31 December 2020, compared to NZ$116.8m at the same date in 2019.
