The first offering for direct public investment into a dairy
farm is out of the starting gate, having raised a minimum $2
million required, triggering the unconditional purchase of
the Mid-Canterbury farm.
Work has already begun on preparing a Southland dairy farm
for similar investment.
After PRD Investments Ltd opened the two-week offer, it was
extended a week and closed on August 9.
A total of about 40-45 investors put up the minimum $20,000
each to purchase their shares, with subscriptions edging
beyond the minimum $2 million threshold, MyFarm director
Andrew Watters said.
''We have now gone unconditional to buy '' the Mid-Canterbury
property, Mr Watters said when contacted.
PRD Investments Ltd is looking to raise $9.5 million,
including up to $3.8 million from investors, to purchase the
181ha, going-concern, Poplar Rd farm in Mid-Canterbury for
$13.75 million, which includes land, plant, 690 cows and
Promoted by MyFarm, which itself has $500 million tied up in
47 dairy farms, PRD Investments is offered the ''collective
investment vehicle'' to pool smaller public investments to
make a larger investment. Each property is a separate,
Poplar Rd farm would be purchased from a MyFarm syndicate,
which would initially get paid a $455,000 establishment fee
and then after that charge a 0.5% annual management fee.
The offer has a registered prospectus and plans to list to
attract small investors. MyFarm also has other syndicates
operating, but they have a minimum threshold of $250,000,
with the average subscription being about $500,000.
''It was slow getting started and we had to get the
prospectus through the FMA (Financial Markets Authority). The
Fonterra [contamination] scare was not helpful, but we got
beyond the minimum,'' Mr Watters said.
When first going public with the offer, Mr Watters hoped if
the ''collective investment vehicle'' was attractive to
smaller investors, four to five farms a year could be
syndicated in this way by MyFarm.
Analysts have said the liquidity, or tradeability of the
shares, will be crucial for the new syndicates to work.
The prospectus outlined future plans for trading on the
Unlisted platform, which Mr Watters has said would be a
priority to achieve before the end of the year.
Craigs Investment Partners broker Peter McIntyre said PRD
would likely be happy with the offer having begun, while
investors will be pleased they will have a share in both milk
payouts and Fonterra's value-added shares.
''They [PRD] will want to get a number of these syndicates
under way to form a [share] trading base.
''Being listed remains key and once trading gets under way
it's likely the investment will become more popular,'' Mr