Alterra banks $3.2m from NZ carbon forestry assets

Article by Matt Birney for Business News WA

ASX listed Alterra, formally known as Carbon Conscious, is now debt free and have an additional $2m in cash to pursue new opportunities after settling the sale of their New Zealand forestry plantations.

Alterra have owned the 800 hectare pine plantation for some years and previously had contracted forward sales of the resultant carbon credits known as “New Zealand Units” from the plantation.

However, the company recently mutually agreed with their off take customer to terminate the carbon credit supply contract so that Alterra could sell the property.

The sale settled this week for NZ$3.6 or around AUD$3.2m.

Alterra used the proceeds from the sale to pay down 100% of their $1.3m debt leaving an additional $2m in the war chest to pursue new business opportunities identified in the dairy industry.

The company is now looking to expand its agri-business by bringing a new concept of dairy farming known as “System 5” to W.A.

System 5 is essentially a climate controlled dairy that works on the theory that if a cow is comfortable it will produce more milk.

Feed is cut and fed directly to the cows and they are not required to walk long distances every day to be milked.

Importantly they are not forced to endure the elements and therefore are not subjected to the extreme heat or cold.

Whilst Alterra are looking to get into the new age dairy business, the company is still underwritten by contracted revenues of around $32m out to the year 2027 from its carbon forestry management business.