This is an offer to wholesale investors of Units in Birch Hill Limited Partnership, a limited partnership formed to develop a portfolio of Mānuka forests located in the central and lower North Island.
Subject to the success of this Offer and due diligence, the Partnership will invest in a 545 hectare property (468 cha) at 343 Waikakahi Road property and other (yet to be contracted) property to create a portfolio of Mānuka forests. The Waikakahi Road property has been contracted for $3.125 million and subject to due diligence and finance is expected to form the
first 468 cha of the Birch Hill portfolio.
Planting of the initial Pongaroa Forest is planned for the autumn/winter of 2021, with the first significant harvest expected three years after planting. The other forest(s) will be established in 2022 if the additional land is sourced in 2021.
The Partnership is to enter into a sharefarming agreement with Comvita to establish and manage the forests for an initial term of 15 years. The Partnership will receive a hive set down fee of 5% p.a. of acquisition and development costs funded by the Partnership for the first five years and a 45% share of the honey produced (split 30% and 15%). The Partnership is also expected to produce environmental benefits and carbon credits which provide additional revenue.
A total of $6.5 million is sought in the Offer which is subject to a minimum capital raise of $5 million. The minimum is expected to allow the Pongaroa property to be developed. The purchase and development of the budgeted additional property (up to a further 532 cha) is subject to Comvita's sign-off and ability to execute further developments (i.e. tree availability). The financial forecasts in this information memorandum have been formulated on budgeted figures for establishing 1,000 cha. The targeted loan to value ratio will remain at 30%.
The Offer is for 650 Units in Birch Hill LP at an issue price of $10,000/Unit and is subject to a minimum subscription of 500 Units. The minimum investment is 5 Units ($50,000) and thereafter the size of an investment can be increased in multiples of one Unit ($10,000).
On application, a payment of $5,000/Unit applied for (50%) is required. Further payment calls will be subject to the amount of capital raised, development plans and when further properties are contracted. Partners will be given 20 working days notice for when further funds are due. If funds haven't been called by 30th November 2022 the investor obligation will lapse. This means final Unit holdings will be based on the amount of capital that has been called by this date. 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 Close – 16th February 2021 with 50% applied for due. Other fund calls will be with 20 working days notice. Obligations on any remaining calls of capital lapse if capital has not been called by the 30th November 2022.