Rural closes fund early
Rural Funds Management (RFM) is to close its Agricultural Income Trust 1 early and has dropped the cotton farm component of the investment.
Rural Funds Management (RFM) is to close its Agricultural Income Trust 1 early and has dropped the cotton farm component of the investment.
The trust will now just develop two vineyards in the Barossa Valley and a further two in the Adelaide Hills.
As a result of dropping the cotton project, the trust is now looking to raise $9.5 million compared $20 million as announced in the prospectus. The scheme will now close at the end of October rather than December.
RFM managing director David Bryant says excluding the cotton farm will give investors better returns and this investment will now be included in the AIT 2 prospectus which will be launched after AIT 1 closes.
It is understood one of the reasons behind dropping the cotton project was due to a large private investor in the first trust that has substantial cotton investments and was looking for just wine investment schemes.
The average annual returns for the revised AIT 1 are now 24 per cent for the 2004 tax year rising to 28 per cent in 2012. This compares to 19 per cent in 2004 for the combined wine and cotton investment.
“The reduced equity raising makes AIT 1 more profitable and more exclusive,” says Bryant.
“With current subscriptions of $6.7 million it is likely that the offer may close before the end of October.”
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