Seeka considers sale and leaseback of Australian orchards

By Rebecca Howard

July 29 (BusinessDesk) - Kiwifruit grower and marketer Seeka said it is looking at a potential sale and leaseback on some or all of its orchard portfolio in Australia.

Funds would be used to accelerate orchard development and repay debt, it said.

Seeka Australia currently holds over 273 hectares of orchards in production or development, with approximately 278 hectares available for new development. The portfolio includes 163 hectares of kiwifruit and 110 hectares of European and Asian pears, of which 21 hectares are new variety pears yet to come into full production.

Seeka has approximately $49 million invested in Australia across both the post-harvest and orcharding business.

The strategy is consistent with Seeka’s recent approach in New Zealand where orchards were purchased in Northland and sold to third parties with a secure term packing commitment, it said.

In March it said that as of Dec. 31 it had made a $600,000 gain on $7 million of sales from its Northland orchard portfolio. Last week it said in the six months to June 30 it had sold and settled $5.4 million more, with a $1.2 million gain on sale. This month, it has sold and expects to settle another $11.7 million, with a $1.5 million gain on sale. In addition, $7 million in conditional sales have been agreed and are expected to settle before Dec. 21. These sales will result in a gain of $1.6 million when completed, it said.

Seeka still holds $21.6 million in orchards for sale and is actively engaged in sale negotiations.

It also confirmed it expects earnings before interest, tax, depreciation and amortisation are likely to range from $32.5 million to $33.5 million in the 2019 calendar year. Ebitda before impairments and revaluations was $26.2 million last year.

USX-listed Seeka shares last traded at $5.15 and have gained about 21 percent so far this year.

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