Silver Fern Farms has confirmed a Chinese firm is set to buy a 50 percent stake in the co-operative.
Shanghai Maling Aquarius will pay around $261 million for half of the country's largest meat exporter, if shareholders chose to accept the proposition in a meeting next month.
The 50-50 partnership will see Silver Fern valued at $311 million, equating to a share price of $2.84 and the co-operative has plans to pay a special dividend of $0.30 per share in the near future.
Mr Hewett says the board unanimously recommend shareholders accept the offer of Shanghai Maling Aquarius, partly owned by Bright Foods, with the Chinese firm set to wipe out all debt.
He also described the move as a partnership rather than a buy-out, saying there would be co-chairs and shared directors, and the capital injection would "turbocharge" their Chinese strategy.
The decision must be ratified by more than half of the company's shareholders to go ahead and a meeting will be held next month.
"They are not buying part of Silver Fern Farms, they are investing alongside us," Mr Hewett says.
"This is about getting married, and if you're getting married for the money, it's only part of the equation, and it usually ends in tears. This is about aligned values, this is about unleashing our strategy and getting the capital to do that."
The company also outlined plans to return half of their annual net profit to shareholders through rebates and dividends.
"We have a partner who supports our strategy, wants us to accelerate, has the resources and relationships to help us specifically in China, and will provide us with significant capital to put us in a position of not only financial sustainability, but one of strength," Mr Hewett says.
"It will enable us to reinvest in the business in a manner we simply cannot achieve by ourselves. The end result should be higher, and more stable, returns from the plate to the pasture."
The deal comes after Prime Minister John Key refused Government funds to support the Dunedin-based co-operative yesterday.
"The Government won't be giving it the money," Mr Key said at his post-Cabinet press conference.
"It's not a matter for the Government."
Finance Minister Bill English said the Government cannot do anything to stop Chinese investors from taking a 50 percent stake.
"The owners are New Zealand farmers and they have total control of it now," he said.
"We can't really force them to own a business if they don't want to."
Mr English said it was up to the farmer owners to decide whether they wanted to invest in it.
Mr Key and Mr English both say any Chinese bid would go through the Overseas Investment Office in the usual way.
The deal is worth a total of $311 million.
Shanghai Maling Aquarius manufactures and markets canned food, bottled water, flavourings, frozen food, and other related products with more than 800 supermarkets across China.
3 News / NZN