Farmland Partners Inc. (NYSE:FPI) shares are trading lower on Thursday.
The company said it is selling a portfolio of 46 farms, comprising 41,554 acres of farmland, for $289 million in a single transaction with Farmland Reserve.
The portfolio includes farms across several regions and states, including Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, and the Carolinas.
“Farmland is a ‘total return’ investment, with asset appreciation typically accounting for a majority of the overall return on invested capital,” said Luca Fabbri, FPI’s President and CEO.
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The CEO indicated that the firm plans to use the resulting capital to reduce debt by around $140 million, buy back stock, pursue acquisitions, and address other corporate purposes.
Additionally, he noted that similar to the previous year, they expect to be able to make a significant special distribution to shareholders at year-end.
According to Benzinga Pro, FPI stock has gained over 2% in the past year. The company had a total debt outstanding of approximately $393.0 million on June 30, 2024.
As of June 30, the company had access to liquidity of $163.8 million, consisting of $5.7 million in cash and $158.1 million in undrawn availability under its credit facilities compared to cash of $5.5 million and $201.1 million in undrawn availability under its credit facilities at December 31, 2023.
Following the latest development, the company’s total gain on sale will be approximately $50 million, or approximately 21% over the aggregate net book value of the farms comprising the portfolio.
In 2023, FPI also sold approximately $200 million of assets at a gain in excess of 20%.
Price Action: FPI shares are trading lower by 1.04% to $10.20 premarket at last check Thursday.
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