Rural Funds Group is set to offload its broiler chicken farms for a combined $72 million and reinvest in three Western Australian cattle properties.
The ASX-listed agriculture player – whose shares have taken a hit recently following two unfavourable reports from short-sellers – said it had agreed to sell its network of 17 poultry farms to ProTen Investment Management, with the proceeds to help it pay down debt and shift to what it considers a more lucrative beef cattle market.
The company also announced on Monday it had entered into options to acquire three cattle properties north of Perth – Petro, High Hill and Willara – for $22.6 million inclusive of estimated transaction costs.
Rural Funds Group shares were worth $1.78 before Monday’s open, having rebuilt somewhat over the past two months after a report by US short-seller Bonitas wiped $335 million from the company in a day.
Rural Funds, which is taking Bonitas to court over the allegations of financial impropriety, dropped as low as $1.36 in August, before copping another hit last month when Hong Kong-based Bucephalus Research suggested the company was using “creative accounting” to inflate asset values.
Rural Funds has rejected both reports.