Landcorp's Crafar farm bid 'best chance' to retain NZ control

By Susie Nordqvist

May Wang, who is fronting the bid by Chinese investors UBNZ to buy the Crafar farms. Photo / Natalie Slade
May Wang, who is fronting the bid by Chinese investors UBNZ to buy the Crafar farms. Photo / Natalie Slade

Real Estate Institute boss Peter McDonald has endorsed a bid by state-owned farmer Landcorp to purchase the Crafar empire which he says could be this country's best chance of retaining local control of the properties.

It was unlikely any individual farmer would have the capital to compete with Chinese-backed company UBNZ's rumoured $230 million offer or a competing bid confirmed this week by Government owned Landcorp, he said.

UBNZ Funds Management has signed a conditional sale agreement with receivers KordaMentha to buy the farms, subject to Overseas Investment Office approval and the absence of a better offer.

Allan Crafar says he's also planning to come up with the cash he needs to trade his way out of debt by the close of tenders at 4pm today.

The Crafar farms, which Allan headed, went into receivership last year owing more than $200 million to PGG Wrightson and banks.

Separately Landcorp has made a realistic offer for the farms in a cash deal which could be settled quickly.

McDonald said the number of people that could compete on such a large portfolio was limited and that Landcorp was the "possibly the only local organisation I could see as having a serious bid," he said.

It was unlikely any individual New Zealand purchaser would get to the stage of being competitive on the whole profile, he said.

The receivers' preference for a clean, quick deal meant it was possible the farms would be sold as a block, rather than individual units because of the time it would take to market and sell the farms this way, he said.

"Piecemeal may mean some end up sold and some not. It may take two to three years to place all those farms if they (the receivers) were looking to maximise the best market price."

Federated Farmers said it welcomed the bid from Landcorp, but is concerned the receivers' "clear desire to sell the 16 farms as a complete unit" could "remove the opportunity for New Zealand farmers to acquire individual farms".

"The underlying issue is New Zealand's weak capital markets. With relation to CraFarm, Landcorp is really he only bid we know of that doesn't involve significant overseas capital," Federated Farmers national president Don Nicolson said.

"New Zealand is utterly dependent upon overseas capital and rectifying this is a major policy challenge for Government and an issue for corporate and rural New Zealand," he said.

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