Rural Funds Management has emerged as the buyer of 5409 hectares (13,366 acres) of farmland around Maryborough, owned by Thai-owned company MSF Sugar.

In a statement issued to the ASX today, RFM (ASX: RFF) said it had contracted to buy the farmland, plant and equipment and 8060 megalitres of water for $81.1 million.

The contract is expected to be settled in October.

The deal puts the longer future of the Maryborough sugar mill and its 90 farmer supplies under a cloud, as a significant amount of the land will be converted to macadamias.

“RFM intends to progressively convert the farms to approximately 2200ha of macadamia orchards, with a substantial portion of the remaining area able to be used for cropping,” the statement to the ASX reads.

“RFM is in discussions with several potential lessees and will provide further details of the agreed development program in due course.”

About a quarter of the MSF Sugar farmland is leased to farmers.

“RFM will will seek to lease the balance of the cane farms which are currently operated,” the statement reads. “The transaction will include a two year off-take agreement in respect to the cane produced on the farms, or a reduction in the purchase price.”

The RFM statement said the transaction included an opportunity to purchase additional water rights.

Maryborough Canegrowers chairman Jeff Atkinson said he was still be contacted by either MSF Sugar or RFM regarding the sale.

“It’s a bit of wait and see at the moment, but hopefully we’ll know a lot more soon,” Mr Atkinson said.

RFM said the purchase would be funded from an approved increase in RFF’s debt facility. The forecast FY21 11.28c/unit distribution remained unchanged.

RFM is understood to have about $900m worth of farmland under management in Australia.

MSF Sugar is owned by the Mitr Phol Group, the world’s fifth largest sugar producer. MSF Sugar has operated in Australia since 2012.