Dairy farm receivership: BNZ owed $36.5m from Waitonui limited partnership

Proper attendance to animals’ welfare is a primary consideration, the High Court said in excusing receivers from liability.

A large-scale dairy farming business once worth more than $125 million but placed in receivership last month owes its bank $36.5m, a court judgment reveals.

Three dairy farms in the Waitonui Group, which ran dairy operations in Otago and near Taupō, are involved in the receivership that includes four entities set up under a limited partnership structure.

Receivers Andrew Grenfell and Kare Johnston of McGrathNicol were appointed on April 15 and are marketing the farms for sale as going concerns after the farming group’s bank, BNZ, pulled the plug.

The receivership is complex because the group leased land and livestock from third parties which are not in receivership – Stockco Capital and WMAH LP (Spv 3) Limited.

The latter was put in liquidation on May 9 by resolution of its shareholder - Waitonui Milltrust Agricultural Holdings LP, one of the entities included in the Waitonui receivership.

Grenfell and Johnston successfully applied to the High Court to excuse their receivers’ liability due to risks associated with the leases.

That risk includes a near $7m “balloon” payment due this week if they are unable to abandon the land or livestock.

“Maintenance of the livestock, desirably on the land, is preferable,” Justice Pheroze Jagose noted in the judgment in favour of the receivers.

“Proper attendance to animals’ welfare is a primary consideration.

“The receivers disavow any intention to use or benefit from the livestock or land, and the livestock lessor has released them from liability.”

The judgment noted the Waitonui farming group grazed about 5000 cattle on over 2000ha.

“At the time of the receivers’ appointment on April 15, 2024, the group owed the bank some $36.5 million.”

Waitonui was established in 2019 when Milltrust, a UK investment manager, acquired nearly 30 per cent of Waitonui Milltrust Agricultural Holdings (WMAH).

The move consolidated a number of investments already made which Milltrust at the time said culminated in the establishment of a large-scale New Zealand integrated dairy and beef farming enterprise.

Milltrust said the venture had received the support of the UK local authority pension fund assets managed by Milltrust and its affiliate, Milltrust Agricultural Investments.

In 2019, Milltrust said WMAH had total assets of more than $125m. It said it owned and managed a portfolio covering a total of 3500ha, milking 10,000 cows and producing more than four million kilograms of milk solids a year. It claimed to be one of dairy exporter Fonterra’s biggest suppliers.

In 2021, Milltrust Agriculture Investments was acquired by UK-based Future Planet Capital.

Future Planet today has a 24.9 per cent shareholding in Waitonui Farm Management and Waitonui Milltrust Agriculture Holdings General Partner (both in receivership).

The largest single shareholder of both entities with 27.99 per cent of each, is Gerard (Ged) Donald of Hamilton.

Other shareholders in the two entities are Elderslie Holdings with 23.51 per cent in each, and Sunset Holdings with 16.5 per cent of each. Another party called Waitonui Holdings LP has a 7 per cent share in each.

Duncan Bridgeman is managing editor of NZME Business, which includes the Business Herald and BusinessDesk.

- Additional reporting Andrea Fox