Investment Opportunity - Dairy Farm Investments (Ruawhata) Limited

• Dairy Farm Investments (Ruawhata) Limited was formed in November 2007 to acquire the dairy farm property at Ruawhata, near Pahiatua and has subsequently undertaken significant capital expenditure on that farm, purchased a support farm at Takapau in Southern Hawkes Bay (NZ) and acquired a cornerstone shareholding in a dairy farm near Warrnambool in South West Victoria (Australia). Shareholders in the investment own their share of all these assets.
• The farm has 184.5ha of freehold land and 131.5 ha of leasehold land. The company has completed a major development program on the farm since the acquisition including the construction of a new 54 bale rotary cowshed, a feedpad that is adjacent to the shed, relayout of the farm paddocks and races plus significant re-grassing and development of the farm.
• The addition of the support unit at Takapau has enabled the company to have a very efficient operation with management control over all aspects of the farming operations. Costs before interest and depreciation are projected at $2.93 per kg of milk solids for FY10. Contribution of $3.22 per kgms is generated based on a payout of $6.05 per kgms.
• Production has risen from 161,416 kgms in the year prior the acquisition to an estimated 295,718 kgms in FY10 and the projected production for FY11 is 320,000 kgms. The property farms approximately 900 cows. Further but more modest gains are projected for the following years. The farm had 189,423 Fonterra shares on acquisition and currently holds 310,000 shares.
• Investment of $NZD 4.5 million is being sought from eligible persons to enable to company to repay debt that was used in the expansion phase and to fully develop the potential of the properties. The target investment size is $500,000 per unit. Eligible persons are defined by s5(2CC) or those excepted as being members of the public as defined in s3(2)(a) of the Securities Act 1978.
• Each investor will own Ordinary Shares in the company with the same rights as existing shareholders. New investors will be entitled to reap the benefits of the development that has already been undertaken and the enhancement of property value that this creates.
• Interested parties who qualify may obtain an Information Memorandum from: