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Silver Fern deal faces deadline

NZN 19/06/2016 Pattrick Smellie and Tina Morrison

Time is running out for the proposed tie-up between Silver Fern Farms and a major Chinese investor as a deadline looms.

The tie-up between the country's largest meat processor and China's Shanghai Maling Aquarius has a deadline of June 30 and requires an Overseas Investment Office recommendation and ministerial approval before it can proceed.

However, the OIO downed tools on the application weeks ago, and said late last week that it was still waiting for the applicants to supply further information.

A delay would risk the deal becoming entangled in a special shareholders' meeting called by dissident members of the Silver Fern co-operative, scheduled for July 11 in an attempt to scuttle the deal.

A time extension would also require the agreement of Silver Fern's bankers, who are keen to see the deal proceed because it would allow the heavily indebted meat company to repay some $261 million of debt.

"The OIO is still awaiting information that will enable it to complete its assessment of the application," a spokesman told BusinessDesk on Friday.

"Therefore we can't give an indication yet of when the application will be sent to the relevant ministers for a decision."

Land Information and Associate Finance Ministers Louise Upston and Paula Bennett need to sign off the deal.

Shanghai Maling Aquarius has bid for 50 per cent of Silver Fern Farms in a deal that would give it effective control of the company through the use of casting vote powers on key issues.

Silver Fern declined to comment on whether it thought a decision was likely by June 30, saying it can't speculate on the OIO's process. It also declined comment on the implications for the company if a decision wasn't made on the application before the deadline.

The conditions of the deal state the transaction has to be unconditional by June 30, unless the parties agree to extend the deadline.

Should it go ahead, the deal would see Shanghai Maling pay $261m for half the company and allow it to repay all of its debt, removing a threat from its banking syndicate to withdraw support.

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