The horticultural and forestry plantations from collapsed agribusiness management investment firm Rewards will go up for sale in early March.
The Perth-based company’s receivers McGrathNicol confirmed to Fruitnet.com that they are currently preparing the sale of the assets after a rescue deal coordinated by the Rewards Growers Advocacy Group fell at the final hurdle.
Rewards Group followed Australia’s larger managed investment scheme operators Timbercorp and Great Southern Plantations into receivership last May. According to local newspaper the West Australian, its collapse trapped more than A$250m in managed investment scheme funds raised across tropical fruits, berries and forestry projects.
In late 2010, the Black Tree consortium, led by Tony Jack, thrashed out a deal to take over Rewards’ forestry assets early this year in a bid to recoup some of the A$135m that 5,000 investors had ploughed into its teak and sandalwood projects, the West Australian reported.
The rescue deal, agreed by secured creditor National Australia Bank, was coordinated by the Rewards Growers Advocacy Group (RGAG), which had arranged for Food and Beverage Australia (FABAL) to take on Rewards’ horticultural schemes.
Despite securing creditors' approval for the rescue plan in December, the deal collapsed this week after failing to meet the key conditions set out to the creditors. The deal put forward by FABAL and Black Tree required all parties to sign unconditional contracts by 31 January, and land sales to be tied up by the end of this month.
An independent review of the company’s teak plantations, which raised serious doubts as to their commercial viability, appears to have been a key sticking point, since it underlined that investors who’d put more than A$70m into the projects were unlikely to see any return on their investment.
The last-minute collapse of the rescue plan now leaves receiver McGrathNicol with the task of selling off Rewards’ assets and those of associated company the Ark Fund.
Some of Rewards’ project properties were originally leased from the Ark Fund, but those lease agreements are now annulled, so the assets represent a combined Ark Fund and Rewards Group portfolio.
“Commencing early March 2011, both the horticulture and forestry assets will be marketed for sale domestically and internationally by expression of interest in a parallel process to enable potential purchasers to bid for all properties and assets,” said McGrathNicol’s James Thackray. “The process will be flexible, allowing the purchase of either of the portfolios and even individual properties if that provides a better outcome.
The Rewards/Ark Fund portfolio of horticultural projects includes mango plantations in Western Australia and Queensland covering a combined 616ha, stonefruit orchards spanning 207ha, citrus plantations in Western Australia (60ha) and berry plantations (175ha) in Victoria and Queensland, he said.
Interest in the properties is strong, according to Mr Thackray, who told Fruitnet.com that some of the parties involved in the rescue plan could bid for the assets, such as Black Tree and FABAL. Overseas parties are also eyeing the properties, with New Zealand forestry fund GMO Renewable Resources reported to have registered interest.
“The horticultural properties and improvements are established assets which have generated a significant level of unsolicited domestic and international enquires,” Mr Thackray told Fruitnet.com. “The forestry assets have been established over many years and have also been the subject of a high level of enquiry from potential bidders.”
Rewards’ berry plantations are to be advertised for sale separately this month with a focus on the local markets in Victoria and Queensland, according to Mr Thackray.
