Crafar receiver says conditional sale to UBNZ still 'on foot' despite May Wang's bankruptcy

Crafar receiver says conditional sale to UBNZ still 'on foot' despite May Wang's bankruptcy

Crafar Farms receiver KordaMentha says the conditional agreement for the sale of the 16 central North Island dairy farms to UBNZ Funds Management Ltd remains "on foot" despite yesterday's bankrupting of May Wang who is fronting the bid.

KordaMentha's Brendon Gibson said the deal remained subject to Overseas Investment Office approval and he continued to communicate with the applicant's solicitors as to the progress of their consent application.

The proposed sale of the Crafar dairy farms to UBNZ and Hong Kong-based Natural Dairy for more than NZ$200 million is viewed by some in the banking community as critical to establishing a benchmark for rural asset values given the low recent volume of farm sales provides little transaction evidence to support banks’ provisioning levels.

Aside from Wang being declared bankrupt, the bid also faces a further hitch. The Serious Fraud Office is investigating transactions between Natural Dairy and UBNZ based on information received from the Overseas Investment Office.

The 16 Crafar farms, New Zealand's largest family owned dairy business, were put into receivership in October last year owing about NZ$216 million to their lenders Westpac, Rabobank and PGG Wrightson Finance after interest.co.nz revealed animal welfare issues at the farms.

Meanwhile, in its bi-annual Financial Stability Report the Reserve Bank said last month farm prices may need to continue falling to see “substantial” buying interest reemerge and also warned that further falls could see some dairy farmers, who took on debt to expand during the boom times, slip into negative equity. The latest Real Estate Institute of New Zealand figures show there were just 46 farm sales in October, equal to the previous record monthly low of 46 recorded in January this year and down 42% from the 79 farms sold a year ago. The October sales included just four dairy farms.

Wang, bankrupted at the High Court in Auckland yesterday, plans to appeal the decision.

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FYI, Bill English's directive letter to the Overseas Investment Office  - http://beehive.govt.nz/release/directive-letter-sets-balanced-investment...

Here's a thought...from whom are UBNZ getting their line of credit to buy the 16 farms at a bloated price which just by chance would lead to a much greater level of balance sheet protection for the banks that loaded this sector with so much debt........follow the money!

It has been reported that Westpac will fund them to the tune of $30m if the sale goes ahead. Hence Westpac not persuing the bankruptcy of May Wang after they had indicated that they would.

I think that is what is going on CO...the trading banks have had a chat and the game is to fund the buyer UBNZ with cheap loans to pay top dollar for the 16 farms...the end justifies the means and the cost of lending too much on 16 farms protects the loans on hundreds of farms by propping up the value of the dairy units....Long live the rural land bubble and the profits of the banks....carry on milking the farmers!

Both Westpac and the receiver have denied that.

The milking or propping up of their bubble?

Perhaps KordaMentha  are just covering their butts at this stage, allowing this doomed offer to progresss ( on foot)  to ultimate failure, where upon a more realistic  bid  will be picked up. Meanwhile the Crafar clan remain squaters on and around the home property, good on them showing a finger to the shiney suits (for the time being).

Crafar and his tribe of slimebags can go throw themselves under a rolling tractor.

How is it that he and his inbred mob of hillbillies can flout the law with complete impunity?

at in excess of $3000 a day plus expenses for Mr Stiassny do you think they care(the receivers) how long this drags on for

Quite so RJ, but this is the process...or perhaps better termed, gravey-train

I guess we know who is really important, its the banks and the broken loans they never should have made, greed makes people do the darndest things, lending without cashflow naughty,naughty, dont worry the Govt will bail you out whatever the cost. Selling out to a business funded by a sovereign state, we will ignore that and start teaching Cantonese at all schools. 

 We are run by morons who pose as idiots at night.