Silver Fern deal 'deeply disappointing' – Labour

  • 17/10/2015
Silver Fern deal 'deeply disappointing' – Labour

Opposition parties are warning there's a downside to the decision by Silver Fern Farms shareholders to sell 50 percent of the company to China's state-owned Shanghai Maling Aquarius.

The shareholders in New Zealand's biggest meat company have voted 82 percent in favour of the deal.

Shanghai Maling Aquarius offered $261 million cash, a special dividend and money to bankroll the co-operative for seven years.

The funds will allow Silver Fern Farms to repay all of its debt and removes a threat from its banking syndicate to withdraw support.

Labour's primary industries spokesman, Damien O'Connor, says it's "deeply disappointing" the board didn't work harder on a New Zealand-based alternative.

"This vote hands control of a New Zealand-owned co-operative to a Chinese company with no guarantee of any benefits in the short, medium or long-term," he said.

"New Zealand farmers now face a decreasing number of opportunities to produce, process and brand what should be New Zealand's proudest and most productive sector."

NZ First leader Winston Peters says farmers and going to realise it's a sour deal.

"They get a one-off bump financially but trade away half-ownership and give the Chinese government the say over the business plan, chief executive and the timing and quantity of dividends," he said.

"It seems nothing has been learned from the recent Brazilian takeover of the Australian meat industry."

As part of the deal, Shanghai Maling will appoint a co-chair of the venture, who will have a casting vote on issues including the appointment of the chief executive.

Opponents of the sale, which still requires Overseas Investment Office approval, failed to convince the board to consider alternative funding proposals that would keep the co-operative in New Zealand hands, with 76 percent of votes cast against that resolution.

Shanghai Maling is one of four Shanghai Stock Exchange-listed subsidiaries of Bright Food, which has expanded rapidly since being founded in 2006 to become China's second-largest food manufacturer.

SFF's shares were suspended from trading in July, having traded at 35 cents, a fraction of the $2.84-per-share value of Shanghai Maling's proposal.

The shares resumed trading on Sept 16 and were last at $1.30.