MANAGEMENT
MACHINERY
Irrigation a ‘dam’ good thing. PAGE 29
Unimog celebrates it’s 70th birthday. PAGE 36
NEWS Taking up the challenge of feeding the world.
PAGE 6
TO ALL FARMERS, FOR ALL FARMERS NOVEMBER 15, 2016: ISSUE 619
www.ruralnews.co.nz
More or less $261m? DAVID ANDERSON
ANOTHER TWIST has appeared in the controversial Silver Fern Farm merger with Shanghai Maling, this time over exactly how much cash SFF may actually get from the Chinese company. Reports on the long-planned deal, in force from early next January, have been that Shanghai Maling will invest $261 million to acquire a 50% of Silver Fern Farms Ltd. However, there is now conjecture about whether SFF will actually receive this amount, based on media comments by Bright Foods (the owners of Shanghai Maling). In an interview with the South China Morning Post newspaper in late October, Bright Foods spokesman Pan Jianjun said Shanghai Maling Aquarius’ agreement to buy a 50% stake in Silver Fern Farms “was a vivid example of Bright Foods’ resolution in strengthening and deepening the internationalisation of its businesses.” And he added, “A swing in the yuan’s exchange rate prompts us to be more meticulous in deal making, but our goglobal strategy remains unchanged.” Pan told the SCMP that the price for the 50% stake in Silver Fern “has yet to be set”, despite financial reports saying Maling would pay US$178m (NZ$261m) for a half share of the New Zealand sheep and beef exporter. However, Silver Fern Farms says this is “not new” and there has always been a possibility of a difference in the amount Shanghai Maling will pay for its
50% stake. “Yes, there is potential for a variation, but that’s not new,” a SFF spokesman told Rural News. “In the first notice of meeting [to shareholders on the special meeting to vote on the SFF/Shanghai Maling deal] it says, ‘approximately $261 million’ on page 1 of the chairman’s letter’.” This was more fully described in the ‘description of the transaction’ in footnote 4, the SFF spokesman said. “The precise investment amount is also subject to a variation to the extent
that supplier investment shares or rebate shares are redeemed prior to completion, or to the extent the actual net assets position at 30 September 2015 differs from the latest forecast provided to Shanghai Maling upon which they based their analysis. We do not expect these variations to be significant.” Official approval for the joint venture deal came in October this year, with the Overseas Investment Office giving its consent, saying it was “satisfied the investment will be of substan-
tial and identifiable benefit to New Zealand”. “The proposed investment is now unconditional and is set to be completed on January 4, 2017, the first business day of the new financial year for the partnership,” SFF said after gaining OIO approval. SFF chair Rob Hewett says the new partnership will create a unique opportunity, “making Silver Fern Farms financially the strongest company in the NZ meat industry, able to confidently invest in our business”.
Showtime!
Georgia Henderson, of Christchurch, gives her son, Hunter (15 months), his first farm experience in getting up close to a lamb in the Mike Greer Homes City Farmyard at this year’s Canterbury A&P Show last week. More on show page 13.
TOUGH YEAR AHEAD PETER BURKE peterb@ruralnews.co.nz
SHEEP AND beef farmers face a season of uncertainty and turmoil with a prediction that incomes could be slashed by 13% and the global market for their products will be “subdued”. That’s the message in Beef + Lamb NZ’s new season (2016-17) preview just released. It predicts the average farm profit before tax will be just $67,000, meaning some farmers will be alright while others struggle. Causing the problems are a fluctuating exchange rate -- especially versus the US$, the uncertainty created by Britain’s decision to leave the European Union (Brexit) and general sluggishness in many key markets including China. The report notes the NZ economy’s relatively strong growth but that the global market is “somewhat fragile”. China’s growth continues to slow as the economy rebalances, yet economic growth there remains high relative to other countries. Last year while the tonnage of meat sold to China increased, this was offset by a 19% drop in price reflecting the rebalancing of the Chinese economy. Meanwhile Brexit, notably, has caused a drop in the value of the pound.
PHOTO NIGEL MALTHUS
TO PAGE 5
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