Alterra sells part of Dandaragan farm

ASX-listed agribusiness Alterra has sold 913 hectares of its Dambadgee Springs property for $3.1 million to a local farmer, and will use the funds to support its avocado development projects and pay debts.

The company has entered into two contracts for the sale of the Dandaragan property, one valued at $1.6 million, which is expected to settle by June 10, and a second contract valued at $1.5 million and is expected to be finalised by January 20 2021.

Of the money received, Alterra said $1.3 million from the first contract and $700,000 from the second contract was expected to be used as working capital. The $1.1 million leftover will be used to retire debts.  

Alterra will retain 727 hectares of the property, including the Yandin Wind Farm from which it receives $2.5 million contracted income, as well as surface water resources with development potential and areas suitable for livestock, plantation forestry and carbon forestry.

The property was purchased in March 2017 for $4.2 million, plus $200,000 in stamp duty.

In a statement, Alterra said after settlement it expected to receive approximately $100,000 per year from a combination of leasing the retained land and wind farm with an estimated ongoing annual return on investment of 15 per cent based on investment on the remaining equity it held.

Alterra managing director Oliver Barnes said Alterra was prioritising its development activities in Western Australia's South West and the majority of capital releases from the sale would be redeployed into Alterra’s avocado investment program, including the recently announced Carpenters Project in Pemberton.

“Alterra intends to continue adding value to the remaining land at Dambadgee Springs through pasture improvement for grazing as well as carbon and plantation forestry,” Mr Barnes said.  

Alterra called a trading halt yesterday morning which is yet to be lifted.