Silver Fern Farms deals with shareholders' discontent
Silver Fern Farms, New Zealand's largest meat processor, will hold a special meeting of shareholders on its planned tie up with China's Shanghai Maling Aquarius.
The meeting will be called after Silver Fern received a request from some of its farmer shareholders despite the company saying it is of no benefit and risks being disruptive to the deal.
It is preparing for the meeting in accordance with the Companies Act and the company's constitution after receiving a request from John Shrimpton and Blair Gallagher, representing a group of 80 shareholders, it says.
Silver Fern received approval in October from shareholders for the partnership with Shanghai Maling, which it expects will allow it to pay off debt and provide it with funds to upgrade plants.
Mr Shrimpton believes the proposed deal wasn't properly approved by shareholders and has asked for the meeting to allow shareholders to reconsider it, the company says.
"The board considers that convening a meeting along the lines requisitioned is of no benefit to the company or its shareholders and is not an effective use of the company's management and financial resources," Silver Ferns says.
"It risks being disruptive to satisfaction of the remaining conditions to the investment by Shanghai Maling, to the relationship with Shanghai Maling, and ultimately to the company itself, our shareholders and shareholder value."
The Overseas Investment Office is assessing the application from Shanghai Maling which it received in October and expects to make a decision ahead of Shanghai Maling's June 30 deadline.
The deal involves Shanghai Maling Aquarius, a unit of China's state-owned Bright Food Group, taking 50 percent ownership of the meat processor in return for $261 million of cash, a special dividend, and funds to bankroll the co-operative for seven years.