Crafar Offers Go to Overseas Investment Office

17 February, 2012
For Immediate Release
Crafar Offers Go to Overseas Investment Office

The Crafar Farms Purchase Group has included details of its two $171.5 million offers for the 16 farms as part of a new submission sent to the Overseas Investment Office this morning.

The submission (attached) outlines the Group’s plans for improving the Crafar Farms and also includes other benefits that come from the farms being run by experienced local dairy farmers and local Iwi.
“We’ve included the initial offer of $171.5 million that was tabled in September last year with the receivers and a revised offer for the same price that was tabled in December,” said Group spokesman Alan McDonald.

“We felt it was necessary to send both offers to the OIO to ensure there was no doubt anywhere that Shanghai Pengxin was not the only option available for selling the farms. With details of the Shanghai Pengxin offer, and the conditions imposed by the OIO finally made publicly available, the Group believes it is important to show New Zealanders that our Kiwi offer betters Shanghai Pengxin.”

Mr McDonald said the new submission to the OIO contained substantive legal discussion relative to the implementation of the OIO Act and regulations in the context of Justice Miller’s recent ruling. It also outlines in more detail what the Group plans to do to improve the farms if the Shanghai Pengxin offer is rejected again.

“For example the Group plans to spend at least $18 million to bring the farms up to optimum condition and maximise production while the ancestral links our Iwi buyers have with some of this land will ensure restoration and access to the important historic sites,” said Mr McDonald.

“That figure is an aggregate based on what our buyers believe is a minimum figure for each farm. Each buyer in the Group will own just one or two farms, if the offer is successful, and the Group believes the combination of local farm knowledge and investment combined with Iwi stewardship of important historical sites trumps any benefits an overseas buyer can bring to the table.”

Other key points in the submission include:

· The Purchaser Group would mainly employ sharemilkers on the farms. This would give those sharemilkers the opportunity to grow their own dairy businesses and provide the traditional pathway to dairy farm ownership

· The Group’s budgeted aggregate spend – over first three seasons - of $18 million plus will equate to a 25-30% increase in aggregate farm productivity and performance and an increase of up to 15% in employment levels (new permanent staff and contractors) across the farms

• Taharua Farm – if acquired by the relevant Iwi member of the Purchaser Group - would likely be made a Benchmarking Farm for the Central North Island in partnership with Dairy NZ.
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• Purchase Group buyers will implement plans to protect riparian stream margins through stock proof fencing and other measures and are open to discuss land and habitat preservation actions with DOC and other responsible parties.
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• The Group’s Iwi members, being the tangata whenua, are very aware of the importance of the Mohaka River and will continue activity, already underway with DOC on other parts of the river, to halt further degradation of the Mohaka catchment. Iwi are open to potential placement of Nga Whenua Rahui covenants on relevant parts of the land, and to discuss the granting of walking access rights across the land to the river or other habitats of interest.
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• Ngati Rereahu will preserve the Nga Heranga pa site and guarantee access to the site on the Benneydale Farm at no cost to the Crown while the buyers of the Tiwhaiti Farm will enter into a heritage covenant with NZ Historic Places Trust for the Q21.5 pa site.
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• Walking access will be allowed across parts of the Benneydale Farms and Taharua Station along the Taharua River and to Te Rere Falls
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“While our group has yet to carry out formal due diligence the $18 million plus is based on what our buyers believe is the minimum that will have to be spent on capital improvements needed to ensure each farm reaches full production.

“Given that these farms are quite literally over the back fence of properties already owned by the individual buyers in our Group, they have a very good idea of what needs to be done and what production can be sustainably achieved from these farms.

ends

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