Elders is set to walk away from its disastrous foray into forestry through a deal that will cement the Caratti family as the State’s biggest holders of prime agricultural land. Source: The West Australian
Under the deal Elders will end a $1 million-a-month cash burn on leases over unviable Esperance plantations and hand control of the listed investment vehicle Agricultural Land Trust to a company controlled by Allen Caratti.
It will give the Caratti family control of the historic Linkletter’s Place farm once owned by US celebrity investor Art Linkletter, an advocate of the Esperance district’s potential.
The farm was sold for a then-record $32.5 million in 2005 as Elders’ forestry arm Integrated Tree Cropping wielded its chequebook.
Linkletter’s Place will take the Caratti clan’s holdings in arguably Australia’s best farming district to more than 70,000 hectares. These holdings include the 4800ha Beef Machine farm that a company directed by Caratti’s wife and business partner Tina Bazzo bought from an Elders subsidiary in 2006 for $20 million in a sale-and-lease-back deal.
It is understood the Caratti family will bulldoze and burn the plantations on the cancelled leases and remediate the land for cropping and livestock.
Sergio “Mick” Caratti built the family fortune clearing farmland in the 1960s and passed the empire onto sons John and Allen, who are locked in a bitter legal battle over assets possibly worth more than $1 billion.
Elders managing director Malcolm Jackman said Allen Caratti was a key to the complicated deal. It comes after Elders wound up all managed investment schemes associated with more than 42,500ha of plantations, including 33,677ha at Esperance.
Elders will relinquish its 49.1% stake in ALT, making Allen Caratti the biggest unit- holder, even before he plays a major role in the planned recapitalisation of the company.
In return for getting out of onerous lease commitments, Jackman said Elders would give up its equity in ALT, forgive debt and pay some cash. He said the deal allowed Elders to exit the forestry business after a painful journey that had cost it hundreds of millions of dollars.
“Clearly our bankers were very keen to see us completely get rid of the cash burn associated with forestry,” Jackman said.
It is not known what compensation has been secured for the Bazzo-directed Gucce Holdings in return for allowing Elders to get out of a lease that extends to 2021.
The beneficial ownership of Gucce and the company through which Allen Caratti will own at least 40% of ALT are subject to a bitter Supreme Court row with his older brother John.
John Caratti claims the holdings form part of a family partnership, which he wants divided between himself and his brother.
