Published 28 January 2011
The receivers of the Crafar family’s portfolio of farms has received a new Chinese offer, replacing one which had been fronted by the now-bankrupt May Wang.
Receiver Brendon Gibson (KordaMentha Ltd) said yesterday: “We have accepted an offer from Pengxin International Group Ltd, another overseas entity. It’s by far the best offer we have and it is now a matter of waiting for Overseas Investment Office approval. We understand that the lodging of their OIO application is expected to occur in March.
In a second statement issued by the receivers, Shanghai Pengxin Group Co Ltd chairman Jiang Zhaobai said the group would make full disclosure of its plans to participate in the New Zealand & Chinese dairy industries when it lodges that application.
“We are currently still working on the detail of our business plan, and on our application, so any release would be premature.
“What we can say at this stage is we believe we will bring substantial benefits to New Zealand, some of them perhaps outside the dairy industry.
“Shanghai Pengxin Group is a successful, financially strong company established in 1997 and we have made proper arrangements for financing the purchase of the Crafar farms, if approved, also financing our subsequent development plans.”
Mr Jiang was a civil engineer who moved into real estate, creating a growing conglomerate based in Shanghai but with large investments in other countries. It had total assets of $US2 billion last year and employed more than 4000 people.
Pengxin has 4 main business arms – property development, infrastructure, mining & agriculture. It has completed 2.5 million m² of residential, retail, hotel & commercial developments around China and has plans to build another 20 integrated developments in China over the next 5 years. It’s also involved in construction & investment in toll roads, bus terminals, sports centres & other infrastructure worth $US700 million.
Pengxin’s biggest mining investment is $US350 million for a majority share in a copper deposit in the Democratic Republic of the Congo, plus further exploration rights.
Its agricultural interests don’t include dairy. Pengxin owns 650ha on Chongming Island, at the mouth of the Yangtse River and counted as part of the otherwise-urban Shanghai. Pengxin said its land was largely devoted to sheep breeding, wheat & soybean production and it had entered into joint programmes with research institutes & agricultural colleges to improve production & management techniques. It has another 930ha in Shandong Province which will be devoted to breeding sheep. In 2005, Pengxin spent $US20 million buying a majority interest in a 12,500ha soybean & corn farm in Bolivia, it has agricultural interests in Argentina & Cambodia and is negotiating to buy 200,000ha in Brazil to grow soybeans & cotton.
Mr Jiang has visited New Zealand a number of times and predicted a bright future for food producers who were skilled at all stages of production & distribution and understood the needs of the consumer. He said in his statement: “China, with 1.4 billion people to feed, is already a significant market for New Zealand but offers huge & exciting future potential for mutually beneficial co-operation between the 2 countries.
“We have great admiration for the New Zealand dairy industry & its potential and believe we can be a strong ally for New Zealand dairy industries through our international trade connections and, in particular, our networks of influence within China & Asia.
“We believe we have a role in helping New Zealand capitalise on this opportunity and we look forward to sharing our plans with dairy industry leaders & the public at the appropriate time.”
The 16 Crafar farms on which Natural Dairy (NZ) Holdings Ltd, fronted by May Wang & her company UBNZ Funds Management Ltd, had a conditional offer were owned by Plateau Ltd, Taharua Ltd, Ferry View Farms Ltd & Hillside Ltd, controlled by Allan, Elizabeth & Frank Crafar, of Reporoa until the companies were placed in receivership in October 2009.
Ms Wang’s bankruptcy on 9 December spelled an end to Natural Dairy’s attempt to buy the Crafar portfolio, confirmed on 22 December when Cabinet Ministers Maurice Williamson & Kate Wilkinson declined consent for the bid.
24 December 2010: Government rejects Natural Dairy bid for Crafar farms
13 December 2010: May Wang seeks suspension of bankruptcy order
9 December 2010: The Wang week…..
9 December 2010: May Wang bankrupt
8 December 2010: Judge rejects May Wang’s insolvency scheme, appeal filed
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Attribution: KordaMentha release, story written by Bob Dey for the Bob Dey Property Report.