August 10, 2024

By Gerelyn Terzo, Global AgInvesting Media

The Alberta Investment Management Corporation (AIMCo), which invests on behalf of Canadian pension funds, endowments and government funds, has received the early green light from creditors to control the Yeeda Pastoral Company, a debt-ridden premium cattle producer in Western Australia’s Kimberley region, per an ABC News report. Yeeda Pastoral comprises a pair of historic cattle stations settled in the 1800s as well as the sole northern commercial scale abattoir in the northern part of the state. With a carrying capacity of tens of thousands of cattle units, Yeeda is home to both the oldest station and most modern meat processing plant in the region.

So far, Yeeda Pastoral creditors have accepted a deed of company arrangement proposal from Canadian government-owned AIMCo. The deal was delivered via AIMCo subsidiary TLPH Australian Holdings, established last year for the A$300 million (US$197.3 million) acquisition of a 2.9 million-hectare (7.2 million-acre) portfolio comprising Yougawalla Pastoral Co and Argyle Cattle Co, a deal that was brokered by LAWD.

However, the latest transaction is subject to final approval by the Foreign Investment Review Board, Pastoral Lands Board and the Australian Competition and Consumer Commission (ACCC). Upon approval, the cattle station reins would change hands from Hong Kong’s Asia Debt Management, aka ADM Capital, which reportedly holds an 80 percent stake, to Canada’s AIMCo.

ADM Capital entered the fray in 2015 when it became a financial backer of Yeeda Pastoral through a loan to then-shareholders Jack Burton and Mervyn Key. It was that loan that sped up the expansion of a “feedlot with capacity to hold up to 40,000 cattle at the abattoir site,” per the announcement. Key, founder of Kimberley Meat, sold his 45 percent share in the business as well as his stake in Yeeda Pastoral, to ADM Australia. After building his cattle empire over about three decades, Burton resigned from the business in 2019 and divested his position to other backers.

Yeeda Pastoral, whose assets include Yeeda Station, Mount Jowlaenga Station and the Kimberley Meat Company, went into voluntary administration with KordaMentha in early 2024 after amassing over A$100 million (US$65.7 million) in secured and unsecured debt. Unsecured creditors are poised to receive zero cents on the dollar while high-priority secured creditors could recover up to 100 cents on the dollar.

The embattled Yeeda Pastoral business was not only facing insolvency but was also under investigation for alleged animal cruelty, suspicious cattle deaths and violating environmental protocols for abattoir waste. Last month, the environmental matter was settled when the Western Australian regulators issued a warning to Yeeda Pastoral’s Kimberley Meat Company.

In its letter to Yeeda Pastoral Company creditors, AIMCo assured, “Strong animal welfare, environmental, social and governance standards” will be implemented, pointing to its “strong track record of investing successfully in the Australian and New Zealand primary production and rural land sector”

If AIMCo is successful in its pursuit of the cattle stations, the entity will either be self-governed, or a separate manager may be appointed. AIMCo is no stranger to Australian ag, ranging from investments in forestry to farms amid its co-investment in Lawson Grains alongside New Forests in 2021.

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