Alico, Inc. President and Chief Executive Officer John Kiernan recently discussed several Alico citrus grove transitions and transactions. Here are some of his comments that were included in an announcement of the company’s financial results for the period ending March 31.
- Last year, after evaluating the direct hit it took from Hurricane Ian in 2022, we made a difficult decision to transition our TRB grove in Charlotte County from proprietary citrus operations to a mix of third-party mining, vegetable and fruit crop leasing activities.
- This year, we evaluated another struggling grove and have decided to also move beyond citrus there to realize its highest and best use. In 2022, Alico entered into a purchase option agreement with a third party, E.R. Jahna Industries, Inc., for the sale of approximately 899 acres of land at a price of approximately $11,500 per acre on our 2×6 grove located in Hendry County, Florida, which expires in January 2025. It is expected that this option agreement will be exercised by the end of December 2024. It is understood that Jahna plans to conduct sand-mining operations on the land once regulatory approval has been obtained. Alico will have the right to lease back most of these acres, including 340 net citrus acres, for de minimis lease payments.
- In April 2024, we entered into an agreement to sell another approximately 780 acres of land at the 2×6 grove to a third party for approximately $7 million ($9,000 per acre). This includes an option to purchase another 680 acres within 10 months from the closing date of the sale, at the same price per acre. Alico will continue to grow citrus on those 680 acres for the next harvest season. This new transaction, which is expected to close at the end of July 2024, illustrates our strategy of monetizing underperforming citrus groves on a case-by-case basis to redeploy capital to generate better returns for our shareholders.
“To be clear, Alico will continue to conduct our regular citrus operations at nearly all of our groves for years to come.” Kiernan said.
Source: Alico, Inc.
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