Murray River Organics sells property to Costa Group

Dried fruit producer Murray River Organics has sold part of its sprawling Nangiloc property to Costa Group. See what the sale includes and how much it went for.

Murray River Organics is pursuing an aggressive asset realisation strategy to pay down debt.

DRIED fruit producer Murray River Organics will sell off part of its Nangiloc property to a subsidiary of horticulture giant Costa Group for $4.5 million.

The deal will see MRO carve off 113ha of planted conventional citrus and wine grapes from its sprawling 3040ha Nangiloc property.

Coupled with surrounding vacant land, the sale includes 390ha, with final settlement expected early next year pending approval of a subdivision plan.

In March, the ASX-listed company flagged it was looking to sell $20 million of Sunraysia property as part of a five-year turnaround strategy to pay off mounting debt.

In 2019-20 the company posted a loss of $39 million, bringing total losses since its 2016 float to more than $116 million. It’s net debt was reduced to $41 million in 2019-20 from $68 million in 2018-19 after having exited an expensive lease of a Colignan property late last year.

Part of the restructure — now in its second year — is an aggressive asset realisation program, beginning with the sale of Nangiloc and MRO’s Fifth Street Vineyard, a 118ha table grape property at Merbein West.

MRO chief executive Valentina Tripp said the sale of the Fifth Street property was in its final stages. It was last valued at $13.5 million and has 70ha of table grape plantings with a forecast yield of 1200 tonnes this year. It was bought with the proceeds of the company’s float four years ago for $10.4 million.

Ms Tripp said Costa would take responsibility for the operations and management of the parcel to be sold, including responsibility for operational costs and entitlement to crops. As part of the arrangement Costa will lease the property until the sale is finalised.

The remaining 2650ha of the Nangiloc property is the subject of a feasibility study focusing on optimum crop combinations — including organic low-THC cannabis and oat crops — and a potential desalination plant.

MRO is shifting away from conventional farming to focus on organic crops to supply its own-branded range of muesli and pantry staples.

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