China investment in Silver Fern Farms a 'watershed moment' for NZ

China is Silver Fern Farms' largest market. In the year ended September 30, 2014, its exports to China were worth $385.6 million - up from $332.4 million the previous year. Photo / Ross Setford

Chinese investment in Silver Fern Farms would become a "watershed moment" for New Zealand if it comes to pass, a meat industry expert has said.

The Herald reported this morning that Shanghai Maling Aquarius - the Bright Foods listed subsidiary which has been lined up to take a 50 per cent stake in Silver Fern Farms - is understood to have a $300 million war chest to back its bid for a slice of the Kiwi meat co-operative.

The extent of the proposed Chinese commitment has made it more difficult for those Silver Fern Farms shareholders who want to keep control of their hybrid co-operative in NZ ownership to persuade their board, and more importantly the company's bankers, to support other alternatives.

Sufficient support was earlier raised from a range of parties for a $40 million to $45 million underwrite for a rights issue to help recapitalise the company. An announcement on Silver Fern Farms capital raising is expected this week.

John McCarthy, a former chairman of Meat Industry Excellence, a group set up to promote change in the industry, said: "This is a watershed for New Zealand, it is a crossroads for NZ inc and has the potential to change the face of our rural communities and our to blur that unique point of difference and global opportunity."

Finance Minister Bill English said last week that Silver Fern Farms' future was up to to its shareholders.

McCarthy said English's comments around the Silver Fern Farm's "debacle" were disturbing.

"His comments are a cop out and are indicative of the government turning its back on rural communities and New Zealand in favour of foreign control," McCarthy said.

"With the pragmatic cynicism that is the hallmark of this administration they have paid lip service to the concerns that have been mounting over the past years as farmers become increasingly worried as to the future viability of their farms and their inter-generational opportunities, he said.

McCarthy said Primary Industries Minister Nathan Guy had been "missing in action" in the red meat space. "This government is all about snuggling up to the Chinese opportunity and it appears they are prepared to do so at any cost, including, in this instance, a passive sanctioning of increasing sales of New Zealand family silver," McCarthy said.