Chinese farms in NZ

Chinese company Shanghai Pengxin's total farm assets in New Zealand are up for sale, including 16 farms and a conditional agreement to buy Lochinver Station - but they are unlikely to be sold.

Because the company wants to restructure, the Overseas Investment Office (OIO) requires it to offer its assets for sale to New Zealanders.

The 16 dairy farms totalling 7885 hectares are the former Crafar family farms, bought controversially for $200 million in 2012.

They were listed for sale on Trade Me on Sunday on a "price by negotiation" basis and by Tuesday had been viewed 657 times.

A spokeswoman for Shanghai Pengxin said the Broadlands, Waikato farms had been put on sale because Chinese billionaire Jiang Zhaobai, who owns 99 per cent of Shanghai Pengxin, wanted to transfer its assets to Chinese agricultural company Hunan Dakang.

Jiang Zhaobai owns 55 per cent of Hunan Dakang.

As a result of any such change, the Overseas Investment Office requires an owner to offer for sale all its assets to "a non-overseas person" - that is, a New Zealander.

The advertisement, under the simple heading "Farms" says: "The Shanghai Pengxin Group Co Limited (SPGL) intends to restructure the ownership of some of its New Zealand farm assets. To enable such restructure, the Overseas Investment Act 2005 requires SPGL firstly to advertise the assets for sale to a non-overseas person."

These assets include not only the former Crafar farms, but also a conditional agreement to buy Lochinver Station in the central North Island.

However, a rider to the advert says "prospective purchasers should note that SPGL reserves its rights to transact, or not transact, on such terms as it sees fit (and that is not obliged to accept any particular proposal). In assessing any proposal SPGL will take account of benefits expected to accrue under its internal restructure proposal".

In other words, this may well be the ultimate Claytons dairy farm sale - the sale you have when you don't have a sale.

The Shanghai Pengxin spokeswoman confirmed that there was no intention on the part of the company to sell the farms but it was going through the procedure because it had to follow the law.

The farms have to be advertised for sale for 20 days.

Waikato University professor Dr Jacqueline Rowarth said the way Shanghai Pengxin was going about the process was "bizarre".

"Why go through with this restructure when the company is in the middle of trying to get approval to buy Lochinver Station?

"It could be that they are trying to buy time and have been affected by the downturn in the Chinese stock market as well as low dairy prices," Rowarth said.

A spokesman for Landcorp, which manages the Shanghai Pengxin properties, said it was "business as usual" and there would be no change to existing arrangements.

 - Stuff


Gary Romano, chief executive of Shanghai Pengxin