Days to the General Election: 27
See Party Policies here. Party Lists here.

BusinessDesk: Landcorp in talks to run Crafar Farms for Pengxin, denies report it would pay $18 mln rent

BusinessDesk: Landcorp in talks to run Crafar Farms for Pengxin, denies report it would pay $18 mln rent

State-owned Landcorp Farming is in talks to operate the Crafar Farms should Shanghai Pengxin Group’s application to the Overseas Investment Office succeed but it has denied a report it would pay $18 million a year in rent.

“The reports are quite untrue – there is no figure yet,” Chris Kelly, Landcorp chief executive, told BusinessDesk. “We are discussing the possibility of running the farms – we had all hoped to have it sorted by now.”

The Chinese company has been waiting almost nine months for an answer to its application to buy the farms, in a deal that is reportedly worth at least $200 million. That would top a rival proposal by a farmer group led by businessman Michael Fay by $30 million.

Hardie Peni, chairman of the Tiroa E and Te Hape B Trusts which are part of the Fay group, said the $18 million figure was based on a standard share-milking agreement and Landcorp’s own production forecasts.

“From what we’re hearing Landcorp have negotiated a deal that is the standard 50-50 share-milking deal familiar to the wider dairy industry,” Peni said in a statement. The Landcorp plan would result in a state-owned company paying rent to “Chinese sitting in Shanghai” as “tenants on what was our own New Zealand farm land.”

The investment banker and a syndicate of local iwi and farmers lodged a $171.5 million bid for the Crafar family farms in September, as a back-up to a rival offer from Shanghai Pengxin being turned down by the OIO.

The purchase of large blocks of farmland by foreigners has been in the government’s sights after the Natural Dairy deal for the Crafar farms emerged in 2010, prompting the government to review foreign investment rules and ultimately impose stricter controls.

(BusinessDesk)

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

5 Comments

“From what we’re hearing Landcorp have negotiated a deal that is the standard 50-50 share-milking deal familiar to the wider dairy industry,” Peni said in a statement. The Landcorp plan would result in a state-owned company paying rent to “Chinese sitting in Shanghai” as “tenants on what was our own New Zealand farm land.”

but as the Harcourst agent puts it:

“Chinese economy we all know about…
Chinese government says it’s time to grow offshore…..
Let’s take a good selection of New Zealands “products” over….
“We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country…. but hey!…. young people coming through see it as “our planet” rather than “our country”

http://static.radionz.net.nz/assets/audio_item/0011/2385074/mnr-20100824-0842-More_than_800-million_dollars_worth_of_property_on_display-m048.asx

Fay Group; they are truely a HONEST kiwi company with profit going back to community.. he even managed to milk NZ On Air $50,000 for his daughter music career..

Can someone please pass me a Tui?

better the devil you know than the devil you don't?

A standard 50/50 deal, without the standard sharemilkers?  A standard 50/50 deal does not involve 3 players, as I understand it.  Doesn't sound standard anyway.

1s this the same Mr Fay that shafted every kiwi in years gone by.

Days to the General Election: 27
See Party Policies here. Party Lists here.