Seafarms Completes $6.83M Sale and Leaseback Deal with Mainstream Aquaculture
Seafarms Group has completed a $6.83 million sale and leaseback deal with Mainstream Aquaculture, ensuring continued prawn farming operations at Cardwell through early 2026 and beyond. This strategic move supports ongoing growth amid strong domestic and international demand.
- Sale and leaseback of Farms 1 and 2 at Cardwell completed for approximately $6.83 million
- Leaseback allows Seafarms’ subsidiary SQPL to operate facilities until January 8, 2026
- Post-leaseback, a 30-year leaseback on Farm 1’s processing plant at nominal rent secured
- Strong demand persists for Crystal Bay® prawns and post-larvae sales boost revenue
- Ongoing engagement with Project Sea Dragon liquidators continues
Strategic Sale and Leaseback Completed
Seafarms Group Limited (ASX: SFG) has finalized a significant transaction with Mainstream Aquaculture Property Pty Ltd, involving the sale and leaseback of Farms 1 and 2 at Cardwell. The deal, completed on April 30, 2025, generated gross proceeds of approximately $6.83 million, providing Seafarms with immediate capital while securing operational continuity through a leaseback arrangement.
The leaseback agreement enables Seafarms’ subsidiary, Seafarm use Queensland Pty Ltd (SQPL), to maintain its vertically integrated prawn breeding, farming, and marketing operations at these key facilities until January 8, 2026. This ensures that the company’s production and supply chains remain uninterrupted during this period.
Long-Term Operational Security and Asset Management
Beyond the initial leaseback term, SQPL will continue to operate Farm 3 in Ingham, the hatchery near Flying Fish Point, and the processing plant located on Farm 1’s land in Cardwell. Notably, the processing plant has been leased back from Mainstream for 30 years at a nominal rent, providing Seafarms with long-term access to critical infrastructure.
To secure its leaseback obligations, SQPL has granted Mainstream a security interest over the processing plant, capped at $1.5 million. This arrangement balances risk management for both parties while allowing Seafarms to focus on operational growth.
Robust Demand and Revenue Streams
Seafarms CEO Peter Fraser highlighted the company’s strong market position, citing sustained domestic demand for Banana prawns and growing international interest in Black Tiger prawns. The Crystal Bay® brand continues to perform well, with all Cardwell operations running normally under the leaseback.
Additionally, the company reported $1.2 million in first-half FY2025 sales revenue from post-larvae sales to other producers, underscoring the success of its breeding and domestication programs. These sales represent an important and growing revenue stream complementing Seafarms’ core farming activities.
Project Sea Dragon and Future Outlook
Seafarms continues to engage with liquidators regarding Project Sea Dragon, a major prawn aquaculture initiative in northern Australia. While proceedings remain ongoing, the company is actively pursuing acquisition opportunities related to the project’s assets and undertakings.
This transaction and the leaseback strategy reflect Seafarms’ broader approach to capital management and operational resilience, positioning the company to capitalize on growth opportunities in key markets.
Bottom Line?
Seafarms’ sale and leaseback deal strengthens its financial footing and operational continuity, setting the stage for growth amid evolving market dynamics.
Questions in the middle?
- What are the long-term financial impacts of the leaseback costs on Seafarms’ profitability?
- How will ongoing negotiations over Project Sea Dragon assets influence Seafarms’ strategic direction?
- What potential operational changes might occur after the leaseback expires in January 2026?
