Olea Australis Limited has sold its flagship oil business Dandaragan to investment scheme giant Great Southern Limited for $18.75 million.
The Asset Sale Agreement was approved by Olea shareholders at a meeting on 21 December.
The sale of assets by Olea to Great Southern includes the land at Dandaragan including the olive grove, buildings and all associated plant and equipment, but would exclude the Dandaragan Estate brand.
On completion of the sale of the assets contemplated by the agreement Olea will continue as an Australian Stock Exchange (ASX) listed company selling high quality olive oil under its Dandaragan Estate brand.
Olea said the sale was conditional on the estate’s water licence being transferred to Great Southern.
A main condition of the agreement is that Olea Marketing will purchase 50,000 litres of Dandaragan Estate 2008 extra virgin olive oil at the average wholesale price and that the buyers will appoint Olea as a marketing agent for the sale of the 2008 Harvest.
Under the agreement all fulltime employees at the Dandaragan olive grove will be offered employment by the buyers on terms that are comparable or superior to their existing terms of employment.
The sale to Great Southern comes a year after Olea bought out investors who had helped establish the Dandaragan olive operation through tax-effective schemes that had been promoted by the company.
In a letter to the ASX Olea’s managing director Ken Richards said it was the intention to return a significant majority of the cash to shareholders by way of dividend or return of capital, subject to the requirements of the Corporations Act and tax considerations.
“Only sufficient funds will be retained by the Company to allow it to continue its operations and to ensure that the value of the remaining assets of the Company will be maximised for shareholders.”
