The law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to this offer if you are a person who comes within Schedule 1, clause 3(2)(a)-(c) or 3(3)(a)-(b)(ii) (inclusive) of the Financial Markets Conduct Act 2013. This includes where the amount invested upfront by the investor (plus any other investments the Investor has already made in the financial products) is $750,000 or more.
If you fall within Schedule 1, Clause 3 of the FMCA, as a result of this exclusion, you may not receive a complete and balanced set of information. You will also have fewer other legal protections for this investment. Investments of this kind are not suitable for retail investors. Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.
The offer is for a total of 365 Units in Napoli Orchard Limited Partnership at an issue price of $10,000/Unit. The minimum investment is 10 Units ($100,000) and thereafter the size of the investment can be increased in multiples of one Unit ($10,000).
On application, a payment of $2,000/Unit applied for (20%) is required. The remaining funds will be due for payment on or before 15 June 2018 to ensure full and final funds are available for settlement of the property on 20 June 2018.
The investment is in Units in Napoli Orchard Limited Partnership. Napoli Orchard LP is being formed to own Napoli Orchard which it will lease to Direct Management Services Limited (DMS). As a Napoli Orchard LP unitholder (Unitholder), you will become a limited partner in Napoli Orchard LP.
Subject to the success of this offer (offer), the Partnership will purchase the land, using a combination of $3.6 million of contributed capital to be raised in this Offer and $2.36 million of bank debt, a 40% initial loan to value ratio (LVR). The Offeror reserves the right to use up to a further $0.5 million of bank debt and declare the sale and purchase agreement unconditional once it has received applications for $3.0 million of contributed capital. If only $3.0 million of contributed capital is raised, the initial LVR would increase to 50%. The Offeror also reserves the right, to itself or through associated entities, underwrite up to $0.5 million of contributed capital for a 2.0% fee. Subject to Unitholder approval, the proceeds of the 2018 crop may be used to pay down debt to achieve the targeted initial LVR of 40%.
The lease terms provide for base monthly rental at the rate of 6% p.a. of the post-tax crop-exclusive purchase price of the Orchard plus 85%of pre-tax annual orchard profits the leased land generates (net of the base rental) and a 6% return on DMS working capital.
The Partnership is forecast to provide limited partners with monthly cash returns averaging 11.0%p.a. during the first five years of the lease to DMS and steady-state distributions of 7.3%p.a. DMS is a leading Bay of Plenty kiwifruit and avocado orchard management and post-harvest operator. It is locally owned and operated, and focused on providing services aimed at increasing orchard productivity and grower profits.
|Napoli Orchard||Bay of Plenty||80 Roydon Downs Road, Paengaroa, 3189|