This is an offer to wholesale investors of Units in Te Arai Gold LP, a Limited Partnership to be formed to acquire 28.0179 ha of land ('Land') located at Waingake Road, Muriwai, Gisborne, and thereon undertake the greenfield development of a 20 cha SunGold kiwifruit orchard. The land is being acquired for $3.5 million and the purchase is conditional on finance, due diligence, and the purchase of at least 10 cha of SunGold licence in 2021.
The Partnership will purchase the Land, develop the Orchard and meet syndicate establishment costs using a combination of $13.24 million of contributed capital to be raised in this Offer and $9.9 million of bank debt, a 43% debt funding level and a 45% loan to value ratio (‘LVR’). Note, the calculation of LVR excludes establishment fees and costs.
The Offeror intends to invest $200,000 in the Offer and has reserved for itself, an allocation of 200,000 Units.
The Offeror also reserves the right to itself, or through associated entities, underwrite up to 4,000,000 Units of contributed capital for a 2.5% fee payable by the Partnership.
Orchard budgets assume that 10 cha of licence is secured in 2021 (the investment is subject to securing this volume of licence) and licence for the remaining 10 cha is secured in 2022. Subject to securing these licences, the Orchard is budgeted to be in full production by FY27. Distributions are expected to commence in FY25 and reach the expected steady state level of 13.4% p.a. in FY27.
The Offeror may elect to accept or reject over-subscriptions and is entitled to scale, order or reject any application as it sees fit.
The offer is for 13.24 million partly paid Units in Te Arai Gold Limited Partnership at an issue price of $1.00/Unit. The minimum investment will be 50,000 Units ($50,000) and thereafter the size of an investment can be increased in multiples of 10,000 Units.
On application, a payment of $0.20/Unit (20%) is due by 6 April 2021. A further $0.40/Unit (40%) is due 1 July 2021 to fund development and the purchase of SunGold Licence. $0.30 (30%) is due April 2022 to fund remaining development. The remaining balance of $0.10 (10%) is due in April 2023.