Natural Dairy confident of winning Crafar bid

Tuesday 13th July 2010 1 Comment

Natural Dairy (NZ) Holdings is confident its conditional agreement to buy the Crafar family farms will get the nod from the receivers.

KordaMentha’s Michael Stiassny and Brendan Gibson said more than 50 bids were made for the 16 dairy farms, which were sent to the receivers last October owing more than $200 million to Westpac, Rabobank and PGG Wrightson, though State-owned Landcorp Farming Ltd. wasn’t one of the preferred bidders.

That leaves Natural Dairy in the box seat, since it already has entered into a conditional agreement to buy the farms pending Overseas Investment Office approval, though the receivers can scupper the deal if a better offer comes along.

“I am confident our purchase of these farms offers the best deal not only to the receivers and creditors of the Crafar portfolio, but to New Zealand in terms of more jobs, increased export revenues, taxation and an overall boost to the agricultural sector and rural industries,” said Graham Chin, Natural Dairy vice chairman, in a statement.

“Our OIO application only relates to the purchase of just 8,615 hectares out of more than 2 million hectares of dairy farmland in New Zealand. It involves only 25,000 cows in a national herd of around 5 million cows.”

Natural Dairy is looking to own the value chain from production through to distribution in a $1.5 billion buy-up of farming and processing assets in New Zealand. Its Chinese subsidiary, Jiangxi Natural Dairy, has entered into a 12-month agreement with May Wang’s UBNZ Funds Management to supply and process about 37.5 million litres of UHT milk for about $105 million, according to documents lodged on the Hong Kong Stock Exchange.

UBNZ Funds will have to source about 39 million litres of raw milk from Fonterra Cooperative Group, and has told Natural Dairy it has leased a vacant factory and sourced three UHT milk production lines.

Businesswire.co.nz

Comments from our readers

On 14 July 2010 at 8:06 am C.Digby said:

That's two votes the National party have lost! I do not want to live in a country where everything is owned by overseas people.