Struggling olive producer and marketer Olea Australis last night unveiled an $18.75 million deal to sell most of its flagship Dandaragan olive business to investment scheme giant Great Southern.
Olea, which last year restructured its relationship with investors in its olive managed investment schemes, said the sale included the Dandaragan olive groves, buildings and processing equipment but excluded the Dandaragan Estate brand, which the company will continue to sell.
The deal comes a year after Olea bought out investors who had helped establish the Dandaragan olive operation through tax-effective schemes that had been promoted by the company. The investors were paid Olea scrip in return for their groves.
Olea said the sale was conditional on approval by its shareholders and on the estate’s water licence being transferred to Great Southern.
Managing director Ken Richards said a substantial part of the sale proceeds would be returned to shareholders through a dividend or return of capital, depending on taxation considerations and Corporations Act requirements.
Mr Richards said Olea would retain sufficient funds to continue operating and to maximise the value of remaining assets for shareholders.
Under the sale deal, Olea will buy 50,000 litres of Dandaragan Estate 2008 olive oil and Olea will be the marketing agent for the estate’s 2008 harvest. It will also share in the proceeds of the harvest.
Olea said Great Southern would offer all of its full-time staff work on comparable or better terms.
The company posted a net profit of $205,054 in 2006-07, a $935,670 turnaround, thanks to a non-cash gain of $3.97 million on the revised value of its olive trees.
Olea restructured its investment schemes last year after investor discontent over ongoing fees paid on an investment that was providing insufficient returns. The sale deal was announced after Olea shares closed up 0.2¢ at 2.2¢.
[Source] Click here