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Seeka to buy Aongatete Coolstores

Kiwifruit grower and marketer Seeka will purchase Aongatete Coolstores for a combined business value of $25 million as part of its growth strategy.

Aongatete is an integrated kiwifruit orcharding and post-harvest company operating across the Bay of Plenty, a location within Seeka's traditional catchment. The purchase is expected to add 4 million to 4.5 million trays of kiwifruit annually and deliver sustainable earnings before interest, tax, depreciation and amortization of between $3.5 million and $4.5 million, Seeka said.

Yesterday, Seeka said it expects its full-year ebitda to be in a range of $36.5 million to $37.5 million, up from previous guidance of $27.5 million to $28.5 million, partly due to changes in the accounting treatment of leases it holds.

It also said that, as of Dec. 31, it had made a $600,000 gain on $7 million of sales from its Northland orchard portfolio. Additional sales agreed or settled since then will represent a gain of $4.2 million if all $25.9 million worth are achieved, Seeka said.

The revised guidance excludes the impact of the  Aongatete purchase, which is expected to settle on March 18.

In November, Seeka announced a three-stage plan to repay debt and strengthen its balance sheet. It raised $47.9 million in a rights issue and now has 29.32 million shares on issue.

Today it said it expects its net bank debt-to-ebitda ratio to be within its policy range of 1.5 to 2.5 times by the end of the year. That takes into account anticipated orchard sales, gains on those sales, operational performance, and capital expenditure. 

Seeka shares last traded at $4.96 and have lifted 15 percent so far this year.

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