Sharechat Logo

OIO considers $105.5 mln buyout of Harvard dairy farms

Monday 18th December 2017

Text too small?

The Overseas Investment Office is considering the sale of Harvard University's 5,500-head dairy farms in the South Island to a Singapore-based investor.

Accounts for the dairy farms filed with New Zealand's Companies Office show that it entered into an agreement to sell its business assets to WHL Otago Operations on May 31, and the sale was now pending OIO approval but the settlement was expected by June 2018. The accounts show that the expected realisation value of all the company's assets, after the cost of selling, was calculated to be $105.5 million as at June 30, 2017.

WHL Otago Operations changed its name to Dairy Otago Operations on Aug. 4. It is wholly owned by Dairy Otago Holdings, whose ownership is split between Waimate-based Peter Williams, who holds two-thirds, and Singapore-registered Dairy Holdings Pte, which owns the remaining third.

The OIO confirmed that it has "received an application for consent for an overseas person to acquire the Otago dairy farms currently owned by Harvard", but was unable to confirm who the application is from or when a decision will be made on the application.

In November, the new Labour government said it had begun policy work to further tighten the sale of local assets to foreigners beyond the initial announcement of an effective ban on overseas buyers of existing residential property. The OIO would not comment on whether this has had an impact in this case.

Harvard bought the Big Sky Dairy Farm properties out of receivership in 2010 for about $32 million, after what was Central Otago's biggest dairy farm operator defaulted on payments in 2007 before being placed in liquidation two years later.

Previously, Bloomberg reported that US private equity firm KKR & Co was close buying the 8,500 acres of dairy farmland for US$70 million, as part of a scaling back of the Ivy League university endowment fund's exposure to natural resources.

The Cambridge, Massachusetts-based university has held about 10 percent of its US$35.7 billion endowment fund in natural resources, built up by former Fletcher Challenge executive Andy Wiltshire who left Harvard Management Co last year. Among those investments was New Zealand's central North Island Kaingaroa forest.

The farms' holding company, DF1, reported a $2.8 million loss on revenue of $14.3 million in the year ended June 30,2017. The prior year, DF1 posted a loss of $4.5 million on revenue of $12 million. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report