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Source: ONE News -
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South Canterbury Finance receivers are set to announce the sale of its stake in one of New Zealand's largest dairy farming groups, ONE News understands.
It comes just a day after the Government rubber stamped the sale of 16 Crafar dairy farms to a Chinese consortium.
Dairy Holdings Ltd's assets include 58 farms, 40,000 cows and 14,000 acres, making it substantially larger than the 16 Crafar farms.
SCF owns around a third of the company, while local and American investors hold the rest.
Since SCF's collapse its stake has been marketed all over the world, and ONE News understands a deal's been done.
"I'm not aware of who may be buying it, but if there's overseas investment involved, they will have to go through the process with the Overseas Investment Office [OIO]," said Finance Minister Bill English.
"What we're most interested in getting some of the taxpayers' money back that we put into South Canterbury Finance."
The OIO could not confirm it had an application from a Dairy Holdings bidder.
In December, the receivers for SCF announced that nearly two thirds of Dairy Holdings would be sold.
That package is made up of its own shareholding of 33.5%, plus those of three US investors and a smaller stake owned by Christchurch businessman Humphry Rolleston.
British private equity fund Terra Firma and Harvard University's investment fund are believed to be among the bidders, but there is speculation it could remain primarily in Kiwi hands.
However, experts say overseas firms can be better placed to take agricultural businesses on.
"Agriculture is quite a tough business to be in and if investors aren't able to run things well and profitably, they have to exit," said Catherine Beard, Executive Director, Manufacturers and Exporters, at BusinessNZ.
General Manager of PGG Wrightson real estate Stuart Cooper says most foreigners who purchase farms use their capital to enhance the value of the asset.
"So generally what we're finding is it's actually been quite a good thing for farmers. What it's doing is providing new sources of capital to farmers to enable them to take their farms to the next level," he said.
But given the objections to the Crafar sale to Shanghai Pengxin, others may be hoping it is a Kiwi offer on the table for the Dairy Holdings farms.
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