Chinese dairy bidder's application finally in

One of the Crafar farms for sale by the receivers. Photo / supplied

The Chinese backed bid to buy up 16 Crafar family farms in receivership has been lodged with the Overseas Investment Office.

The move by Chinese-owned Natural Dairy NZ (NDNZ) comes only 24 hours after state owned Landcorp threw its hat in the ring.

The state-owned enterprise confirmed it would be lodging a bid for the 13 dairy farms and three drystock properties before tomorrow's 4pm deadline.

The farms have a projected production for the 2010/11 season of 4.9 million kilograms of milksolids.

NDNZ chairman Graham Chin said in a statement that he is confident his company's offer will give the best return to creditors. NDNZ has signed a sale and purchase agreement which is conditional on it gaining approval from the Overseas Investment Office.

However, all offers for the Crafar family empire will be put on the table and Landcorp's has the backing of Prime Minister John Key.

UBNZ, the parent company of Natural Dairy NZ, has lost its two New Zealand directors. Ralph Ngatata Love and Keith Rushbrook have both stepped down from the board, according to the Companies website.

Spokesman for UBNZ, Bill Ralston, has not returned phone calls.

Key told Radio New Zealand this morning that the Landcorp bid was a "sensible move".

"I don't think it means that those Crafar farms in receivership will be sold to Landcorp and its not just the Chinese bid - there's also, as I understand it, other bids," he said.

Key said the deal could have some "real potential" for Landcorp.

"On the balance, it seems like a logical move," he said.

Meanwhile, the Green Party is calling on the Government to tighten laws governing overseas investment.

Green Party co-leader Russel Norman said the Landcorp bid is a short term solution and there is still an "open invitation for the rest of the world to buy up New Zealand".

"John Key needs to explain to the public how his Government intends to protect our economic sovereignty while Finance Minister Bill English is busy reviewing our overseas investment rules with the aim of making them more business friendly for overseas investors," Norman said.

A spokesman for SOE minister Simon Power said no extra money was requested by Landcorp for their bid and none would be given.

Landcorp chief executive Chris Kelly said the bid would be funded by debt and equity.

"We have not asked for, nor will we, ask for Government money," he said.

Kelly said the Landcorp board had supported a recommendation by management to place a bid for the farms.

"It's fair to say that the decision was unanimous, the business case made a reasonably compelling commercial argument," he said.

"I'm not absolutely confident ... we've had the farms valued and in my opinion we're going to offer a realistic valuation. Whether it's high enough or not, who knows," Kelly said.

Receivers Michael Stiassny and Brendon Gibson in May said a sale and purchase agreement for the portfolio of 16 farms had been signed with UBNZ Funds Management conditional on Overseas Investment Office (OIO) consent and structured so the receivers could accept any better or more favourable offer.

Graham Chin, vice-chairman of Hong Kong stock exchange-listed Natural Dairy (NZ) Holdings - a 20 per cent shareholder of UBNZ Assets Holdings - said an application was likely to be lodged with the OIO yesterday afternoon.

UBNZ and Natural Dairy last month made an application arguing that a restructured transaction, which included removing UBNZ Funds from the process, did not need OIO consent.

This was dismissed by the High Court but the companies have lodged an appeal.

No further comment would be made while the matter was before the court, Chin said.

A court document on the judgment said the receivers had entered into an agreement to sell the farms to UBNZ Funds Management for $213.2 million plus stock.

"In reaction to Landcorp's confirmation that it will lodge a bid for the Crafar properties, Natural Dairy points out that, at best, will only be a backup bid as Natural Dairy has a signed purchase agreement with the receivers for the properties, subject to OIO approval," Chin said.

"Natural Dairy is confident the OIO will follow fair and due process given the compelling benefits to New Zealand from the purchase."