Settlement of Forestry Estate Acquisition

The Blade, Level 4, 12 St Marks Road, Remuera, Auckland, 1050, New Zealand | +64 9 379 6493
www.nzrlc.co.nz
14 April 2023
Settlement of Forestry Estate Acquisition
New Zealand Rural Land Company Limited (NZX.NZL) is pleased to advise that it has today completed the acquisition
of the forestry estate announced to the market on 21 October 2022.
Under the transaction 100% of a forestry estate located in the Manawatū-Whanganui region in the North Island has
been acquired. The estate comprises of five individual properties with a total area of approximately 2,400 hectares.
NZL’s cost to acquire the estate was approximately $63m. The estate is leased to New Zealand Forest Leasing
(NZFL) for a 20-year term with the first year’s payment being approximately $5m. The lease then has annual CPI-
linked rental adjustments.
The purchase has been funded using a combination of debt and equity. Debt has been provided through an increase
in borrowings from Rabobank of $25.2m. The borrowings are in the form of a green loan established within a Green
Financing Framework managed and reported on, in line with the Asia Pacific Loan Market Association’s Green Loan
Principles.
The equity component has been funded from the proceeds of NZL’s recent accelerated renounceable entitlement
offer and from the proceeds of a $12m convertible note issued to an entity associated with NZFL. As noted in
previous market announcements, NZFL and NZL had agreed for NZFL to subscribe for a direct shareholding in the
estate and contribute up to $18m towards the purchase price of the estate. This has been adjusted to a convertible
note structure to facilitate NZL owning 100% of the estate and, NZL’s intention to repay the note during its term (in
preference to diluting its equity ownership of the estate should conversion of the note occur).
The note is unsecured and pays a coupon of 8% p.a and NZL can redeem any part of the note at any time without
penalty. At 12 months, NZL must start partially redeeming the note on a quarterly basis. NZL will also make note
redemptions from the net proceeds of any capital raisings it may undertake during the term of the note or from the
net proceeds (post any required debt repayment) of asset disposals. The note matures after 18 months and at that
point the note may convert to ordinary shares in the forest owning subsidiary. Should conversion occur, there are
then put and call arrangements to enable NZL to return to 100% ownership of the forests.
For further information please contact:
Richard Milsom - Director, NZRLM or
Mobile: 021 274 2476
Email: richard@nzrlm.co.nz

Christopher Swasbrook - Director, NZRLC
Mobile: 021 928 262
Email: chris@nzrlc.co.nz