May 25, 2020

By Lynda Kiernan

Te Puke, New Zealand-based Seeka Limited – the largest grower of kiwifruit in the country – announced it has agreed to sell three of its Australian kiwi orchards with a total land area of approximately 199 hectares (491.74 acres), for A$26.5 million (US$17.4 million). 

The deal to divest the Austral, Lakes, and Hayward orchards follows Seeka’s strategy of selling orchards and formulating a lease-back agreement, with the proceeds from the deal to be used to pay down debt and accelerate further orchard development in Australia.

Under the terms of this transaction, Seeka has agreed to a lease back for up to 30 years with two initial terms of 10 years followed by two five-year terms, with a separate lease component for the water shares required by the orchards. 

Looking Back

In only the past two years Seeka has been active in a string of strategic kiwi deals in New Zealand and Australia.

In April 2018 the company spent NZ$40 million (US$29 million) to acquire kiwi orchards and packhouse facilities for the packing and storage of avocados, kiwifruit, and citrus, along with additional assets located in KeriKeri from T&G Global. 

Under the terms of the transaction, Seeka will gain control of approximately 80 hectares of orchards currently growing Hayward, ENZAGold, ENZARed, and Zespri Sungold varieties of  kiwifruit.

Three months later, in July 2018, Seeka announced its intentions to sell six of these orchards along with other of its Northland holdings totaling 288 hectares across nine orchard parcels. 

These intentions became a reality in November 2018, when the company announced a sale agreement for $15.9 million.

Then, in September of last year Seeka agreed to sell another of its properties –  a 20 canopy-hectare kiwifruit orchard for NZ$15.5 million (US$9.75 million) to Boosters PLPP.

As the sole investment of the listed Private Land and Property Fund, the orchard was leased back for a fixed rate by Seeka, who manages the orchard and uses the proceeds from the sale to pay down debt, and to fund its ongoing infrastructure development project at its Waipapa Road Post-Harvest facility.

0 The company has also stated that at this point, it expects earnings before tax to range between NZ$9 million – NZ$11 million (US$5.5 million – US$6.73 million).

Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.