Australian poultry giant sells off millions in property
The new owner of Australian poultry producer, Inghams is selling off real estate in a deal that could secure over $600 million.
American private equity firm TPG, which bought Inghams last year for $880 million, wants to sell properties in Australia and New Zealand and lease them back for the poultry business for 20 years. The firm intends to repay its debts, and reinvest in chicken breeding, meat processing and animal feed mills.
The company's major poultry processing plants are on the Brisbane River and at Hoxton Park, near Liverpool in western Sydney.
Poultry commentator Peter Bedwell believes TPG could be preparing for a float of Inghams, if processing is separated from the more profitable livestock feed division.
"In the year that it was sold, a profit of $220 million was reported, and it's fair to speculate that a lot of that was as a result of the feed mills. In the year past, that figure has been reported as $250 million."
Bedwell says the US was the only country which could have been allowed to purchase Inghams outright, because of its $1 billion limit on foreign investment in Australia. That's much larger than the $244 million limit which triggers action from the Australian Review Board (FIRB).
"Inghams missed having a public float, so it could still do that, just at a time when Australia is allowing other countries in Asia to invest up to $1 billion under Free Trade Agreements," Bedwell suggested.
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