Overseas Investment Office's approval welcomed

‘OVERSEAS INVESTMENT OFFICE APPROVAL CLEARS WAY FOR SILVER FERN FARMS PARTNERSHIP’

20 September 2016: Silver Fern Farms welcomes the New Zealand Overseas Investment Office’s approval of the application by Shanghai Maling to invest $261m into the company to create a 50/50 partnership.

The proposed investment is now unconditional and is set to complete on 4 January 2017, the first business day of the new financial year for the partnership.

Silver Fern Farms Chairman, Rob Hewett said the new partnership with Shanghai Maling creates a unique opportunity for Silver Fern Farms.

“Shanghai Maling’s financial investment will make Silver Fern Farms the financially strongest company in the New Zealand meat industry with the ability to confidently invest in our business.

“The partnership will help us accelerate our consumer focused plate to pasture strategy globally, and to grow sustainable value for our shareholders and farmer suppliers over time.

“It is very pleasing to now be at this point after nearly 12 months, and we look forward to the partnership getting underway in the new year.”

Shanghai Maling President Wei Ping Shen was pleased the partnership could now be completed. “We are very pleased with the regulatory approval for this partnership. It clears the way for us to move ahead with the partnership. New Zealand grass fed red meat is the best in the world and the Silver Fern Farms' brand has the potential to become a leading red meat brand globally.”

Mr Hewett stated that after the investment completes the Co-operative will, as previously advised, pay a special dividend of 30c per share to all ordinary and rebate shares expected to be paid prior to 31 March 2017) and will commence the redemption of the remaining approximately $5m of Supplier Investment Shares outstanding.

ENDS

About Silver Fern Farms:

- Silver Fern Farms is a leading New Zealand processor and marketer of lamb, mutton, beef, venison and associated products to more than 60 countries.

- The company’s vision: Inspirational Food Created by Passionate People.

- Silver Fern Farms is a farmer-controlled co-operative with more than 6,200 Ordinary Shareholders and over 16,000 farmer partners.

- The company operates 18 processing facilities throughout the country, employing more than 7,000 staff.

- Key markets in North America, China, the United Kingdom and Europe, Asia, the Middle East and New Zealand are supported through a network of international offices.

About Shanghai Mailing Aquarius Co., Ltd

- With a history of over 100 years, the current entity of Shanghai Maling Aquarius Co. Ltd (“Shanghai Maling”) was founded in 1997

- As a listed subsidiary of Bright Food (Group) Co. Ltd, Shanghai Maling is a leader in integrated food manufacturing, food processing and distribution in China

- Shanghai Maling has direct control of 800 supermarket and retail stores, including 56 specialist meat retail stores in Shanghai

- The company’s meat sales network covers large to medium sized cities in Shanghai and other Chinese Provinces: 19 wholesale facilities, distributing more than 2,000 SKU.

About the partnership:

- A 50:50 partnership with total commitment to Silver Fern Farms’ global plate to pasture strategy

- Transaction values Silver Fern Farms’ equity at $311m. This equates to $2.84 per ordinary share, which compares to the $0.35 share price prior to their suspension in July

- Shanghai Maling to invest $261m in cash to own 50% of Silver Fern Farms’ business, in partnership with the existing Silver Fern Farms Co-operative

- A special dividend of $0.30 per share to Co-operative ordinary and rebate shareholders

- The investment will see the company with no debt and a positive cash position at 30 September 2017 (its existing balance date)

- Provides Silver Fern Farms with significant financial capability to accelerate its global ‘Plate to Pasture’ strategy, and to invest in improvements to its plant network.

- Positions Silver Fern Farms with a competitive advantage in China; the world’s fastest growing red meat market

- Creates New Zealand’s financially strongest red meat processing company

- Retains the supplier-controlled co-operative as a 50% shareholder.

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