Irrigation scheme offer extended as target exceeded

Last updated 06:45 10/04/2014

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Hunter Downs Irrigation has reached its first fundraising target, but has decided to extended the deadline for another week.

Co-director Stacey Scott said it had raised $4 million from prospective investors since it launched its initial share offer in March.

"It's a really positive result, but we understand there are others that want to invest in the scheme. The important thing is the fact that we've passed our initial target, and we can go ahead with the next phase of pre-construction," she said.

The initial share offer closed on April 4, but Scott said HDI had reopened it and extended the offer period for its capital-raising until April 17. It has amended its prospectus to reflect the change.

"The original deadline was quite tight. We want to ensure that everyone who is interested gets an opportunity," Scott said.

The Waimate District Council has decided to back investment in the Hunter Downs scheme, with an initial payment of $31,250 for 1250 shares. This could rise to $250,000 if the scheme is built.

Timaru District councillors also gave approval for the council's holdings company, TDHL, to invest the same amount.

HDI has consents to irrigate up to 40,000 hectares of South Canterbury farmland north of the Waitaki River. It launched its initial offer for 40,000 partly paid ordinary shares in March.

Scott said it already had raised enough capital to cover 20,000ha. She said subscribers included not only farmers and landowners within the potential scheme area, but also people "outside the scheme area" who "want to see the project go forward".

HDI hopes to begin construction in 2016, and complete the project in 2018.

HDI chief executive Brian Ellwood said the capital-raising would go towards the "pre-construction" phase, which includes feasibility work and securing land-use consents.

The Ministry for Primary Industries has already granted $671,000 to the scheme's research through its irrigation acceleration fund.

However, Ellwood said MPI could provide up to an extra $7 million in funding, depending on the level of shareholder investment in the scheme.

He said HDI would discuss funding arrangements with MPI after the April 17 deadline.

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- The Timaru Herald

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