AGRIBUSINESS, Tandou Ltd, will sell 250GL of its supplementary water entitlements to the NSW Government for $34 million.
In an announcement on to the Australian Stock Exchange, Tandou, said the Murray Darling Basin Ministerial Council had been advised of the sale. The Mildura-based company plans to pay down alll its bank debt with the sale.
Under an in-principle agreement reached with the Murray Darling Basin Ministerial Council, 250GL of supplementary water entitlements will be sold to the NSW Department of Environment and Climate Change (DECC).
"Final contract documents and terms of the agreement are still to be finalised, but Tandou does not believe there to be any material issues," the company said.
The irrigator, produces and markets crops, including cotton, durum wheat, malting barley, winegrapes, stonefruit and citrus, and Dorper sheep.
Tandou chairman, Dick Warburton, said the agreement was a "wonderful result for Tandou and also for the DECC in securing a significant volume of water for the environment."
"The company's remaining water entitlements are valued at approximately $30 million based on a recent independent valuation and equates to about $0.34 a share," Mr Warburton said.
He said Tandou had retained its higher reliability entitlements on the Lower Darling, NSW Murray and Murrumbidgee river systems and would continue to operate Tandou Farm and its horticultural operations in Menindee NSW.
Agricultural company Tandou Ltd plans to pay down all its bank debt using the proceeds from the sale of some of its water rights.
Tandou shares were up 68.75 per cent, or 5.5 cents, to 13.5 cents at 1429 AEDT.
The water entitlements to be acquired by DECC, on behalf of the NSW Water Administration Ministerial Corporation under The Living Murray initiative, involve the transfer of 250,000 unit shares of NSW Lower Darling regulated river water source supplementary access entitlements.
- with AAP
