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Silver Fern Farms deal approved

NZ NewswireNZ Newswire 20/09/2016

Ministers have approved Shanghai Maling's $261 million bid to buy a 50 per cent interest in Silver Fern Farms.

Land Information Minister Louise Upston and Associate Finance Minister Paula Bennett say the Overseas Investment Office recommended approval and they believe it creates "substantial and identifiable benefit" for New Zealand.

"The investment will put the company in a better financial position and allow it to increase its exports," they said on Tuesday.

"New Zealand shareholders will continue to have 50 per cent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor."

Upston and Bennett turned down an application last year by Chinese investor Shanghai Pengxin to buy the iconic Lochinver Station, a central North Island property.

Overseas Investment Office approval for the $261 million deal was first sought in October last year, and had been slated to go unconditional by June 30, but delays in the approval process saw the companies agree to a revised date of Sept. 30.

The deal would enable Silver Fern to repay its debt, removing a threat from its banking syndicate to withdraw support. It would also enable it to tap Shanghai Maling's supply chain and parent Bright Food's wholesale and retail networks to distribute into China.

The deal attracted opposition from some of the cooperative's shareholders who forced a second special meeting and gained political backing from NZ First leader Winston Peters, though directors said the vote wasn't binding and wouldn't change their mind.

Silver Fern Farm shareholders reaffirmed their support for the sale at a meeting last month, which was called by a group of farmer-shareholders opposed to the deal.

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