This is an offer to wholesale investors of Units in Awatere Valley Limited Partnership. Your money will be pooled with other investors to purchase a 300 hectare property located at 176 Tallots Road, Seddon. The property includes 127 cha of vineyard, 129 ha of pastoral grazing area and the residual is non-effective area. The purchase includes 110 cha of Sauvignon Blanc and 17 cha of Pinot Gris.
The purchase also includes 195 shares in the Blind River Irrigation Scheme (BRIL), the sale proceeds from the 2020 vintage, and vineyard infrastructure/equipment. Some of the water shares are surplus to requirements and could be utilised to develop further vineyard area.
The vineyard is to be managed by Berakah Vineyard Management (BVM) and the grapes sold to Villa Maria under the terms of a long-term supply agreement.
Subject to the success of this Offer and due diligence, the Partnership will invest in the vineyard and other assets, using a combination of $17.5 million of contributed capital to be raised in this Offer and $8.37 million of bank debt. The vineyard, water shares, 2020 crop proceeds and infrastructure/equipment are to be purchased at the value of $24.3 million, which has been derived by private negotiation, but informed by an independent valuation conducted by Logan Stone.
The proposed funding split of the Partnerships capital structure is 68% of investor equity and 32% of bank debt. The bank will classify the loan to value ratio (LVR) around 40%. The LVR is higher due to no security being taken against the surplus water shares, 2020 crop proceeds and the deduction of syndicate establishment costs.
The Offeror reserves the right to use up to a further $1.5 million of short term bank debt, and declare the sale and purchase agreement unconditional once it has received applications for $16 million of contributed capital. The Offeror will continue to raise the balance of contributed capital to reach the $17.5 million it is seeking, but in the event that the Offeror raises less than this, any shortfall will be funded using additional bank debt (increased LVR of 46%). The increased use of bank debt may require additional covenants that affect the forecast returns.
The Offeror reserves the right, through itself or through associated entities, to underwrite a proportion of the contributed capital for a fee of up to $20,000. The underwrite fee is to be paid by the Partnership. The Offeror also reserves the right to accept or decline applications and take any oversubscriptions it wishes.
The Offer is for 1,750 Units in Awatere Valley LP at an issue price of $10,000/Unit. The minimum investment is 10 Units ($100,000) and thereafter the size of an investment can be increased in multiples of one Unit.
On application, a payment of $2,500/Unit applied for (25%) is required. A further $7,500/Unit applied for (75%) is due on 23rd March 2020 for settlement of the property on the 27th March 2020.
As a limited partner the maximum amount payable is $10,000/Unit and no other payments are required to be made other than those specifically agreed to.
IMPORTANT DATES: Offer Closes – 17th March 2020 with deposit of 25% applied for due. The remaining 75% applied for is due on 23rd March 2020.