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Ministerial decision on Chinese bid for Crafar farms won't be today as Fay court hearing looms

Rural News
Ministerial decision on Chinese bid for Crafar farms won't be today as Fay court hearing looms

A ministerial decision on the sale of the Crafar Farms to Chinese company Shanghai Pengxin will not be announced today, understands.

There has been speculation an announcement might come out of today's Cabinet meeting, after which Prime Minister John Key will be holding a regular media conference.

The Overseas Investment Office has given its recommendation on the application to government ministers responsible for approving or denying OIO decisions, Maurice Williamson (Minister for Land Information) and Jonathan Coleman (Associate Finance Minister), following a nine month process investigating the bid.

A would-be rival bidder for the farms, a consortium led by former investment banker Michael Fay, has applied to the High Court in Wellington in an attempt to get a copy of the OIO's recommendation to the ministers. The High Court is set to hear the application on Thursday.

Pengxin's bid has been accepted by the farms' receiver KordaMentha conditional on OIO approval. It has until January 31 to go unconditional on its offer to purchase the farms, which is thought to be to the tune of NZ$210 million. In contrast, the Fay consortium offered the farms' receivers NZ$171.5 million after Pengxin's bid had been accepted.

Given the January 31 deadline, it is expected Ministers will announce their decision on the sale within the next week.

Prime Minister John Key, as well as Coleman, will be in Australia January 27-29 for an annual Australia-New Zealand Leaders’ Meeting and a joint meeting of senior Cabinet Ministers. Williamson will not be on the trip.

The Crafar farms were tipped into receivership by lenders Westpac, Rabobank and PGG Wrightson in October 2009 who were then owed about NZ$216 million.

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The #2 bidder is not so crash hot in that department either.