Silver Fern and Shanghai Maling agree to delay deal

Shen Wei Ping of Shanghai Maling. Photo / Nick Reed

Dunedin-based meat processor Silver Fern Farms and Shanghai Maling have agreed in principle to extend the deadline for their joint venture proposal to September 30 after the first deadline lapsed yesterday.

The parties said the date had been shifted to meet the only remaining condition, Overseas Investment Office approval (OIO), for the $261 million investment by Shanghai Maling.

A spokesman said last week the office was not in a position to indicate when the Shanghai Maling application will be sent to the relevant Ministers for a decision.

"The OIO is still awaiting information that will enable it to complete its assessment, so the ball is in the applicant's court," he said then.

In a statement today, Silver Fern Farms chief executive Dean Hamilton said: "We needed to allow more time to answer the further information requests from the OIO and to then provide sufficient time for the OIO and then Ministers to consider the application.

"We continue to believe that the investment will be approved given its substantial merits," Hamilton said.

Hamilton said the agreement to form a new date reflected "positively on the ongoing commitment of both parties to the transaction".

On the basis of the revised OIO date, the parties have agreed to a deal completion date of January 4, 2017.

Silver Fern has also set a new date of August 12 to hold a shareholder-requisitioned meeting go over the deal again.

The original date for the meeting was July 11.

"The board of Silver Fern Farms continues to strongly believe that the October 2015 meeting held to approve the investment by Shanghai Maling, the materials provided to shareholders, and the voting threshold set were fully compliant and legal in all respects," the company said.

In last year's poll, 82.2 per cent of votes from shareholders were in support of the partnership with Shanghai Maling.

John Shrimpton, a spokesman a group opposing the sale, welcomed the company's decision to call the special meeting for August 12.

"Having been subject to various delays previously, shareholders will finally have the opportunity to vote on whether they wish to properly approve the proposed sale to Shanghai Maling, or not, before the OIO considers whether to grant its consent," Shrimpton said in a statement.

Shrimpton and a ground of Silver Fern Farms shareholders say farmers were not armed with full information about the state of the company's finances before they voted to approve the sale last year. "We strongly believe that shareholders' interests are best served by retaining control and full ownership of our co-operative," he said.