Murray River Organics: Sale of properties continues
After a year of lower farm yields, Murray River Organics — one of the country’s leading organics groups — intends to sell off more assets.
One of Australia’s leading organics groups is set to sell off a number of its assets, with a price tag just shy of $8 million.
Dried fruit producers Murray River Organics has entered a memorandum of understanding to sell its dried vine fruit processing facility in Mourquong, NSW and the Wargan Farm in Mildura for $7.75 million. The sale is expected to be complete by June 30.
It comes after a year of lower farm yields for the company.
Murray River Organics said in a statement today the sale was “in line” with the company’s strategy to “shift away from being a grower and processor and concentrate on building the profile of its organic and Better for You branded retail range”.
MRG chief executive Birol Akdogan said farm yields this year were “below expectation”.
“This deal reinforces our focus on our retail range while making significant inroads into paying down our debt,” Mr Akdogan said.
“We will continue to take steps to not only sustain, but to grow the opportunities for Australian-grown dried vine fruit.”
MRG sold part of its Nangiloc property to a subsidiary of Costa Group in September last year.
The Wargan and Mourquong sale will bring total asset sales for the current financial year to about $23 million with other sales, including the sale of the Gol Gol citrus farm in Mildura in March for $5 million; the Fifth Street Mildura farm for $5.5 million; and part of the Nangiloc farm for $4.5 million.
Mr Akdogan said the company would continue to support existing third-party growers, while outsourcing the processing of dried vine fruit.
“This is about smart allocation of capital, forging effective agri-partnerships in the region, and enabling us to focus on our strengths in organic and better for you supply chains here in Australia and globally,” Mr Akdogan said.
Mr Akdogan said the company could pursue “a number of other opportunities” to divest remaining farming operations in return for cash and long-term dried vine fruit off take supply agreements, in a bid to attract “further investments in new vines”.
The MRG statement forecast the company’s net debt to dip below $30 million by the end of June this year, with further asset sales to be announced in the second half of the next financial year.
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