New Zealand’s Overseas Investment Office (OIO) has today approved Shanghai Maling’s application to buy half of meat processor Silver Fern Farms.
Minister for Land Information Louise Upston (pictured right) made the announcement today. She and Associate Minister for Finance Paula Bennett, the two decision-making ministers, are satisfied that the purchase would create substantial and identifiable benefit for New Zealand.
“The Overseas Investment Office (OIO) recommended that we approve Shanghai Maling’s application because it meets the criteria set down in the Overseas Investment Act 2005,” says Upston.
“We are satisfied that the investment will be of substantial and identifiable benefit to New Zealand, which is the test set out in the Act. The investment will put the company in a better financial position and allow it to increase its exports.
“New Zealand shareholders will continue to have 50 percent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor,” the Minister says.
Silver Fern Farms welcomes decision
Silver Fern Farms has welcomed the OIO 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 says 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 is pleased the partnership can 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.”
Hewett states that, after the investment completes, the cooperative 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 start the redemption of the remaining approximately $5 million of Supplier Investment Shares outstanding.