Swedish investors buy Hart's dairy farms

Following Overseas Investment Office sign-off, a former All Black captain will run the Waikato farms for the Swedes.

Swedish investors have government approval to buy eight Waikato dairy farms owned by NBR Rich Lister Graeme Hart.

The farms were part of 29 former Carter Holt Harvey dairy farms near Tokoroa – supporting almost 20,000 dairy cows over 30,000ha, on land converted from forest – put up for sale in 2010.

They were marketed for $225 million, with the cheapest at $5.1 million, suggesting the Swedish deal is likely to be worth tens of millions of dollars.

Ex-All Black captain Graham Mourie will run the farms for the Swedes.

OIO approval

In a just-released approval by the Overseas Investment Office, Southern Pastures Limited Partnership will buy 3205ha in the Waikato owned by two companies controlled by Mr Hart's Rank Group.

Company spokesman, PR man Cedric Allan, would not reveal the sale price or name the Swedish investment institution which held 99% of the limited partnership.

The New Zealand company involved is Hamilton-based Southern Pastures Founders, he says, and Mr Mourie will run the farms through sister company Southern Pastures Management.

"The eight of them are all in the same geographical area so if you're running a bunch of farms on behalf of investors it's very convenient if the farms are close together, because you can use your labour and equipment much more efficiently.

"This is a model that enables an overseas or New Zealand institution for that matter, to invest in dairy farms but not have to worry about stocking rates and droughts and things like that – there's skilled professionals who are committed and contracted to running them and implementing a business plan."

Mr Allan says the intention is to increase the farms' grassed and farmed areas and increase stocking rates, improve pasture quality and upgrade farm infrastructure.

The milk from the farms goes to dairy giant Fonterra now and will continue to do so, he says.

Production plans

The OIO approval, dated December 4, says Southern Pastures is buying the land to run as commercial dairy farms.

"The applicant intends to increase sustainable production and develop the farming operations through additional capital expenditure, sound farming practices and good management."

The general partner of the limited partnership is Auckland-based Southern Pastures Management, a subsidiary of Southern Pastures (NZ) controlled by Foundation Capital.

Foundation Capital's directors are Prem Maan, an economist and former banker, and Auckland property developer and owner Phillip Wight.

Mr Mourie is Southern Pastures Management's executive director and chairman of Southern Pastures (NZ).

In 2010, Southern Pastures was reportedly seeking $500 million from local and offshore investors for farming investment, mainly in New Zealand.

Foreign ownership of New Zealand farms has been a sensitive issue, following the controversial purchase of the Crafar farms by Chinese company Shanghai Pengxin and plans by two Chinese companies to build dairy factories in this country.

dwilliams@nbr.co.nz

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