Crafar farms' would-be buyer rethinks plans

RETHINK: Natural Dairy (NZ) Holdings, which is bidding for the Crafar farms, has been forced to pull back its New Zealand investment plans.

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The Hong Kong company aiming to acquire the Crafar dairy farms, Natural Dairy (NZ) Holdings, has scaled back its New Zealand investment plans after running up against the Hong Kong Stock Exchange's listing rules.

Disclosures lodged to the stock exchange on August 29 and September 1 show Natural Dairy's plan to own farms, cows and processing plants – involving raising $1.5 billion in capital – constituted a reverse takeover under listing rules and required a new listing application.

Natural Dairy's shares have been on a trading halt since the capital raising was first flagged in February and the company withdrew the proposal rather than fight the listing committee. Its shares have subsequently resumed trading.

"The company will continue to pursue business opportunities in the dairy products business sector" in New Zealand, and will seek supply agreements with dairy processors "directly or indirectly through local agents so as to secure supply of dairy products", Natural Dairy said.

The "very substantial acquisition" deal proposed in February from New Zealand company UBNZ Funds Management, controlled by local woman May Wang, has now been terminated, but UBNZ spokesman Bill Ralston said the decision did not affect the money already committed to buy the Crafar family farms and secure dairy processing facilities.

Natural Dairy said it would continue to negotiate a potential purchase of assets from UBNZ for a further nine months.

Natural Dairy will proceed with its takeover of Ms Wang's UBNZ Asset Holdings, subject to Overseas Investment Office approval, and the purchase of three production lines into China.

The company's Chinese subsidiary, Jiangxi Natural Dairy, previously entered into a 12-month agreement with Ms Wang's UBNZ Funds Management to supply and process about 37.5 million litres of UHT milk for about $105 million.

UBNZ Funds will have to source about 39 million litres of raw milk from Fonterra, and has told Natural Dairy it has leased a vacant factory and sourced three UHT milk production lines.

Fonterra declined to comment on whether the terms of the agreement had changed.

- BusinessDesk