Hit by historical lemon price drop, Limoneira sells two Chilean ranches at a nearly $4 million loss

On November 7, and in the tails of a less-than-favorable financial year, California-based citrus giant Limoneira completed the sale of its two Chilean ranches—Pan de Azúcar and San Pablo, both in the Northern region of Coquimbo. 

The properties, which combined amount to over 3,500 acres, were bought for approximately $15 million by local agricultural private equity group Sembrador Capital, associated with the Chilean investment bank LarrainVial. 

Terms and conditions

As part of the sale, Limoneira will receive an initial cash payment of $6.8 million. In a statement announcing the closing of the deal, the company explained it expects to shield the majority of the proceeds from Chilean tax liabilities associated with the sale.

Consulted by FreshFruitPortal.com, Limoneira’s President and CEO, Harold Edward, explained that the company continues to have an equity interest in a citrus packing operation, Rosales Packing. 

Based in the Northern city of La Serena, the facility was Limoneira’s first incursion in the Latin American country. The company acquired a 35% share of Rosales in 2014, which later increased to 47%. This is another point of connection between the Californian citrus grower and the Chilean private equity fund, as Rosales packs, markets, and sells some of Sembrador’s products.

Edward added that Sembrador will assume full ownership and operational control of the farming assets purchased from Limoneira, and Francisco Vergara, the company’s partner in Chile, will continue managing them. 

The fruit from these ranches will continue to be packed, marketed, and sold by Rosales Packing.

A sour year for Limoneira

In the statement released by the company at the time of the sale, the President and CEO framed the transaction as part of Limoneira’s two-part value-creation strategy. 

“Not including our near-term pipeline, we have identified approximately $355 to $405 million of real estate development assets we anticipate monetizing over the longer term,” he said. “In addition, we continue to streamline our operations, which will unlock even more value for our shareholders.”

This liquidation of real estate assets, which have become an increasingly important part of the company’s business, is a direct result of a financially complicated 2025 for Limoneira. 

The California producer has been hit hard by an industry-wide decades-low plunge in lemon prices, which have led to a 49% accumulated drop in its stock this past year. Difficulties have also reflected on the company’s Q3 financial results, where Limoneira reported a 25 percent loss in total net revenue, amounting to nearly $16 million.

“The lemon market continued to face pricing pressure during the first two months of the third quarter, and our fresh utilization was lower due to holding lemons in storage longer to capture higher prices during the final month of the quarter," explained Edwards at the time.

Tough times call for tough measures, which explains why the company sold the Chilean ranches at a $4 million loss to the same entity that, seven years earlier, was a majority shareholder in the San Pablo ranch. 

Limoneira first acquired the ranches—which now include 500 acres of lemons and 100 acres of oranges, as well as additional unplanted acreage—in 2018. As reported by local financial news outlet Pulso, the American company paid $5.8 million for Pan de Azúcar and $13 million for San Pablo, followed by an additional investment of at least $2.8 million.

*All images courtesy of Limoneira

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