Receivers agree on Crafar farms sale to Chinese interests

Receivers for the four farm-owning companies formerly controlled by the Crafar family say they have signed conditional agreements to sell a portfolio of 16 farms to a company linked to Chinese investors.

The deal to sell the farms to UBNZ Funds Management is conditional on Overseas Investment Office approval.

Receivers Michael Stiassny and Brendon Gibson said last night the deal was structured so that their firm, KordaMentha could accept any better offer received in response to the marketing campaign being run by Bayleys Real Estate.

The farms scattered throughout the North Island were formerly operated by companies involved with Allan, Beth and Frank Crafar, and employed nearly 200 staff on 8000ha, with individual farms ranging in size from 128ha to 1750ha.

The farms support almost 17,000 dairy cows, with several also being run as dry stock units.

The farms are located in the Waikato, King Country, Bay of Plenty, Wanganui, Taranaki and Rangitikei.

Bayleys has called for tenders for the properties internationally, and that process is due to close on June 23.

"We have received significant interest from a number of well-qualified parties to date," said the receivers, who plan to hold a telephone press conference tomorrow.

The Crafar family owed more than $200 million to PGG Wrightson, Westpac and Rabobank.

The OIO is separately investigating whether UBNZ breached the Overseas Investment Act by not obtaining required consents for a separate purchase of two farms on February 11 at Norsewood in southern Hawke's Bay and Waitotara in south Taranaki, and two others four days later in the Manawatu.

Once purchased the farms were transferred to UBNZ Assets Holdings, a company in which Ralph Love and May Wang are both directors. It is 80% owned by the New Zealand-based UBNZ Trustee and 20% by the Hong Kong-based Natural Dairy (NZ) Holdings – the Chinese-owned company which has said it wants to farm New Zealand cows, manufacture UHT heat-treated milk and ingredients for infant formula, and export it to China.

In that case, Mrs Wang said she was a New Zealand citizen and Natural Dairy had only a 20% stake – less than the 25% trigger point for an OIO application – so, in her opinion, the purchase completely conformed with the law.

KordaMentha was appointed to the receivership in October last year and has so far failed to get the Crafar family to leave the home farms at Reporoa, in the Bay of Plenty southeast of Rotorua.

The receivers had negotiated new sharemilking contracts on the dairy units, and overseen investment in management, infrastructure and systems to ensure the farms continued operating through the next season, beginning in June.

Mrs Wang has previously warned that some critical media reports of her bid appeared to stem from efforts to undermine the credibility of Natural Dairy and its plans.

"The plain fact is if New Zealand does not welcome the investment it is inevitable the company will take its $1.5 billion to another dairying nation that does want it," she said.

A total of 25 farms linked to financially-troubled companies that had been controlled by the Crafar family and valued at $206.9m were originally taken over by KordaMentha.