Natural Dairy lodges OIO application

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NZPA | 6 July 2010

Hong Kong-based Natural Dairy says it has relodged its application with the Overseas Investment Office (OIO) to buy the Crafar portfolio of farms, and expects approval in the next few months.

Yesterday state-owned Landcorp Farming confirmed it was bidding for the 16 former Crafar family farms being sold by receivers.

Natural Dairy previously had a New Zealand-registered front-company UBNZ Assets Holdings, headed by New Zealand businesswoman May Wang, sign an agreement with the receivers to buy the Crafar farms, but that was conditional on OIO consent.

Bids are due by 4pm tomorrow on the Crafar portfolio - 13 dairy farms and three drystock grazing properties - covering nearly 8000 hectares in the central and western North Island.

The farms have been in receivership since last October, with receiver Michael Stiassny from KordaMentha last month extending tenders for the farms for two weeks to tomorrow, to allow other parties extra time to complete due diligence checks.

Natural Dairy had previously applied to the OIO, but was asked for more information.

In a statement today, Natural Dairy vice-chairman Graham Chin said Natural Dairy trusted the OIO would follow a fair and due process given the substantial benefits to New Zealand from the transaction.

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Natural Dairy's interest in the farms has once again focused attention on a debate about foreign ownership of assets in this country.

Greens co-leader Russel Norman said Landcorp's bidding for the Crafar Farms would not fix the fact that this country's overseas investment regulations were "an open invitation for the rest of the world to buy up NZ".

A long-term solution would be to restrict ownership of New Zealand land to New Zealand companies or individuals and to leave foreign investors to lease whatever land they needed.

Prime Minister John Key, who is in China on an official visit, said he could not comment directly on the Crafar farms issue because it was before the OIO but understood the wider concerns.

"As a general and broader principle I think New Zealanders should be concerned if we sell huge tracts of our productive land," he said.

In his statement today, Chin said that, in reaction to the news Landcorp had decided to lodge a bid for the farms, UBNZ/Natural Dairy was confident it offered the best return to creditors of the Crafar farms.

"...and it already has a signed sale and purchase agreement for the properties, conditional on gaining OIO approval, which it expects to receive within the next few months."

The proposed investment by Natural Dairy would have a considerable flow on effect to rural industries and commerce, Chin said.

It would add 92 jobs for New Zealanders experienced in farming to the 32 existing employees.

Natural Dairy's plans would mean an annual boost of at least $100m in increased export receipts.

On top of that, apart from the purchase price of the farms, there would be initial capital spending of more than $30m.
Original source: NZPA
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