$50 million in equity sought by Southern Cross Poultry Fund
The Southern Cross Poultry Fund is set to raise around $50 million in equity to buy nine poultry farms in Queensland and South Australia worth more than $70 million.
According to reports in the Australian Financial Review it will become one of the largest poultry production businesses in Australia after companies Pro Ten and the listed Rural Funds Management.
The AFR cited confidential marketing documents show the assets to be acquired include two farms near Coominya about 60 kilometres northwest of Brisbane, Queensland, which produce about 3 million birds a year with contracts secured to Baiada until 2020.
"An additional nine farms will be purchased on the banks of the Murray River, north of the Barossa Valley near Blanchetown. They produce about 9.9 million birds a year with contracts secured to Inghams until May 2024," the AFR reported.
"Overall, 55 sheds will be purchased with a forecast revenue of $13.2 million in fiscal 2018.
"An initial gearing level of between 25 and 45 per cent has been disclosed with investors told they can expect to enjoy a pre-tax distribution yield of 10 per cent a year.
"The fund's indicative modelling suggests a five-year internal rate of return of about 12 per cent."
