Chinese Crafar farm bidder delay

The Crafar properties. File photo

The latest overseas bidder for the Crafar family's dairy empire will have to wait longer to hear whether it has done enough to persuade the Overseas Investment Office that it has met tough new foreign ownership rules.

Shanghai's Pengxin International Group agreed to pay more than $200 million for the 16 farms in January, after a bid by Natural Dairy was knocked back because its directors and frontwoman May Wang failed the "good character test". That sale is subject to government approval.

Pengxin said it planned to establish a full-owned subsidiary, Milk New Zealand Farming Limited, to run the 8000 hectare farms and would work with New Zealand processors to manufacture and export a range of 'dairy based products' for marketing in Asia.

It said it would spend $100 million on marketing in the first five years and aims to lift the farms' production by more than 10 per cent by the end of the third year.

New foreign investment rules mean the Overseas Investment Office must now also assess each application against more criteria, but OIO manager Annelies McClure said this was not the reason for the delay.

The OIO said it was continuing to assess the company's application, but that the sheer number of properties involved in the transaction meant a decision could be some time away.

Pengxin spokesperson Cedric Allan refused to comment on the latest developments.

Pengxin announced on April 14 that it had filed its application for consent. The OIO says it aims to make decisions on "high quality straightforward applications within 50 working days of registration".

"The OIO cannot be specific in terms of when a decision will be made, however a decision is unlikely to be made before June 24.

"The application for consent from Milk New Zealand Holding Limited (a 100 per cent owned subsidiary of Shanghai Pengxin Group Co. Ltd) is complex because of the number of properties the company proposes acquiring.

Each of the 16 properties has different features which the OIO must consider in order to determine which to the 21 factors are relevant."

New foreign investment rules announced in January allow ministers to consider whether New Zealand's economic interests are being adequately promoted and safeguarded.

Potential buyers can argue mitigating factors, by demonstrating their commitment to local involvement.