OIO denies final ruling on Crafar bid

Friday 17th September 2010

The Overseas Investment Office has scotched media reports that it has recommended against Hong Kong-based Natural Dairy (NZ) Holdings’ bid to buy the Crafar family farms.

The OIO denied reports that it has completed its review and was going to reject or severely rein in the bid for the farms, saying it’s still waiting on more information from Natural Dairy.

The reports said State-owned farmer Landcorp Farming was back in the running to buy the farms, something later denied by chief executive Chris Kelly, according to BusinessDay.

Reports of a recommendation by the OIO are “completely incorrect,” said Annelies McClure, OIO manager.

“The OIO is still assessing the application, and due to its complexity, it cannot be specific in terms of when a decision will be made.”

Natural Dairy, whose bid has been fronted by controversial Auckland businesswoman May Wang, bought the Crafar family farms in a deal conditional on the outcome of the OIO review, which doesn’t have a statutory deadline.

Last month, the Hong Kong investment firm scaled back plans to spend as much as $1.5 billion buying up land, livestock and processing facilities and wil focus on the Crafar bid.

The company's Chinese subsidiary, Jiangxi Natural Dairy, previously entered into a 12-month agreement with Wang's UBNZ Funds Management to supply and process about 37.5 million litres of UHT milk for some $105 million.

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

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