Silver Fern board won't be moved

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Chairman says a ‘straw poll’ conducted among farmers during a national roadshow supports company’s stand.

Silver Fern Farms chairman Rob Hewett said the board remained convinced that a joint venture proposal from Shanghai Maling Aquarius was the best choice facing the company and that an offer to underwrite a recapitalisation of the meat processing giant lacked clarity.

Hewett, who, along with executives, finished a national roadshow yesterday to sell the $261 million China-backed joint venture to farmers, said the board was yet to see finer details of an underwriting proposal made public by South Island company director John Rodwell.

"The board's view has remained unanimous," Hewett said. "The underwrite is well-intentioned and you can take nothing away from them for doing it, but the Shanghai Maling opportunity is by far the best opportunity for the company and the shareholders and that's the one that we have been recommending," he told the Herald. He said "straw polls" of meetings showed a high level of farmer support for the joint venture.

"It's not the underwrite, necessarily - although there are issues around a lack of clarity - it's just that the Shanghai Maling is so much better on a number of levels," he said.

State-owned Landcorp said it was one of a group of agribusinesses who had volunteered to support a Silver Fern Farms capital raising, but it said the offer was not in competition to the Shanghai Maling joint venture that farmer-shareholders will vote on this Friday.

Rodwell revealed over the weekend that Landcorp, along with Invercargill-based transport company H.W. Richardson, and Hastings-based animal byproducts processor Lowe Corp, had emerged as potential backers of a capital raising for Silver Fern Farms.

Landcorp was asked by Silver Fern Farms in July to join an underwrite panel to support a potential farmer-led capital raise. The underwriting arrangement was not in competition to the Shanghai Maling capital raise, or even an alternative proposal, Landcorp said.

"Silver Fern Farms is a core strategic partner of ours," Landcorp chief executive Steven Carden said.

"They came to us a few months back for help well before the current capital raising offer from Shanghai Maling," he said in a statement. "We want to see their value-add strategy be successful and are keen to support any capital structure that will help drive their branded strategy in premium markets."

Landcorp would not comment on the Shanghai Mailing offer itself.

Rodwell said Silver Fern Farms board and management pursued the option seriously during July and August of this year, alongside the capital raising process being run by investment bank Goldman Sachs.

Through a process of meetings and presentations made by directors and management of Silver Fern Farms and Rodwell, a group of New Zealand agri-business companies agreed to commit the $40 million considered sufficient by the company to underwrite an issue of preferred shares to its shareholders, the statement said.

"As pointed out by the company recently, this $40 million infusion was not sufficient to gain bank support.

"The underwrite group continues to be in place should that be of assistance to the company post its impending meeting on October 16."

He said the group had grown in number and financial capability, with offers of participation having increased substantially and the capacity to increase further if requested.