NZ Farming Systems Uruguay sells land for US$8.5m

NZ Farming Systems Uruguay sells dry stock pasture land for US$8.5m

March 29 (BusinessWire) - New Zealand Farming Systems Uruguay Ltd. (NZS), the NZX-listed dairy company, has sold 2,500 hectares of land on its Tobay farm in eastern Uruguay for US$8.5 million in a move that will allow it to repay nearly half an outstanding debt to shareholder PGG Wrightson.

Some US$5 million of the proceeds will go to paying back a little under the NZ$16 million NZS owes in arrears to PGW relating to performance payments incurred in the 2007/08 financial year.

The remaining US$3.5 million will allow NZS to intensify its focus on owning dairy-producing farmland and processing facilities. Some 1500 hectares of high quality milk-producing farmland has been retained at the Tobay property, and this is where most of the investment has occurred since acquisition and where two milking sheds are operating.

The land being sold has been used for dry cattle and NZS intends from now on to graze off dry animals on farms of selected producers under contract so as to "dedicate all possible resources to increaseing dairy production on the land which is more suitable for such purpose".

Following the sale, NZS owns 31,000 hectares of farland, with approximately 13,000 hectares in dairy operation once new milking shed under construction now are producing.

The company is also currently pursuing further funding from a bond issue and other sources. NZS shares were up 5.26% today to 40 cents, 49% below their value a year ago.

(BusinessWire)

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