Kiwi shareholders sell out of Shanghai Pengxin's Purata Farms

Medium_1444622961537
Dairy investor John Penno is selling out of Chinese-controlled Purata Farms, the Canterbury corporate he co-founded 15 years ago as Synlait Farms.
Stuff | 12 October 2015

Kiwi shareholders sell out of Shanghai Pengxin's Purata Farms

by GRAHAME COX/

John Penno and fellow Purata Farms shareholder Juliet Maclean are selling their stakes in the Chinese controlled company they founded.

Dairy investors John Penno and Juliet Maclean are selling out of Chinese-controlled Purata Farms, the Canterbury corporate they founded 15 years ago as Synlait Farms.

Shanghai Pengxin bought just under 74 per cent of the corporate farms group early in 2014 through New Zealand Standard Farms (SFL Holdings). The Chinese investors paid $2.20 a share.

Shanghai Pengxin group also owns the former Crafar family farms in the North Island. The Government has rejected Shanghai Pengxin's bid to buy the adjoining Lochinver Station.

The Chinese investment group has withdrawn a bid to buy other farms in Northland, saying the Overseas Investment Office (OIO) was taking too long to process its application.

Purata owns 13 Purata dairy farms and 13,000 cows in Canterbury. Purata is one of the largest dairy farm operations in New Zealand covering a total of 4390 hectares.

The company had a declared asset base of $266 million in the last financial year. Maclean and Penno have been getting their own valuation as they exit.

When Shanghai Pengxin bought into Purata it valued the company at just under $90m - and it promised to spend a further $20m on the farms as a condition of the purchase.

Founding shareholders Maclean and Penno stayed on under the new owners, retaining 16 per cent and 10 per cent of the company respectively.

Based on the $2.20 valuation they have about $25m in the business, not counting a valuation "upgrade".

OIO-approved sale conditions gave Shanghai Pengxin first right to buy Maclean and Penno's shares if either one of the two left.

In May, Maclean said she was leaving the company, as farms manager, director and shareholder.

Penno would be doing the same, she said.

Maclean said she unhappy that Shanghai Pengxin was not willing to buy more farms to develop the business.

On Monday she said that position had not changed and a "pretty straightforward" exit provision in the Purata shareholder agreement had been "instigated".

They had an updated valuation of the Purata farms. It was more than the $2.20 a share when Shanghai Pengxin bought into the business, she said.

She and Penno hoped to have their exit price settled with Shanghai Pengxin in two months.

It is understood Maclean and Penno decided to exit in February, but would not be paid for their shares until February 2016, when Purata is due to release its annual financial results.

OIO manager Annelies McClure said the office "does not have any information showing that John Penno and Juliet MacLean have sold their shares in SFL Holdings".

She said under its consent conditions, SFL Holdings must advise the OIO if it purchases any shares from Penno and Maclean within a month.

McClure said the OIO did receive information "relating to the possible future purchase of shares by New Zealand Standard Farm during the application process".

Purata chairman Gary Guernier said: "it's a private company and I'd prefer not to comment, thank you."

Purata was the foundation business for the NZX-listed processing and marketing company, Synlait Milk, which is now a separate business. Penno is managing director of Synlait Milk.
  •   Stuff
  • 12 October 2015
  • Sign the petition to stop Industria Chiquibul's violence against communities in Guatemala!
  • Who's involved?

    Whos Involved?


  • 13 May 2024 - Washington DC
    World Bank Land Conference 2024
  • Languages



    Special content



    Archives


    Latest posts