In June, NZRL purchased 11 of VGL’s North Otago and South Canterbury properties after the dairy farming giant was placed into receivership.

In a statement to the NZX yesterday, NZRL said it would acquire the 500ha dairy farm for $12million.

The purchase would be funded from cash on hand and a drawing under NZRL’s credit facility with Rabobank.

NZRL made the purchase after the vendor, Crop and Grass Farms Ltd, failed to refinance.

After the settlement of the property, the farm will be leased back to VGL-owned company Performance Dairy Ltd, which is now running the farm.

The lease would have an 11-year term with two 12-year rights of renewal and a rate of about 5.34% per annum, the statement said.

NZRL has also entered into a put and call option deed, under which the property could be repurchased by VGL at any time.

In two years, NZRL will have the option to put the farm to VGL and require it to buy it back.

In each case, the purchase price would be $12million, plus 4.6% per annum calculated on a daily basis from the settlement.

The settlement date for the purchase is August 2.