Last-minute glitches have delayed the scheduled start of a partnership between the meat company Silver Fern Farms and rural servicing company PGG Wrightson.
The new $220 million partnership was suppose to start from today, but last night PGG Wrightson announced that would not happen.
On Friday, PGG Wrightson (PGG-W) said it had raised $78.1 million through the issue of 43 million new shares towards settling the $220 million price tag for 50% of the Dunedin meat co-operative.
The balance was to be raised through debt.
There were no further details available at the time of publication last night.
Under the deal, the 100 Silver Fern Farms (SFF) livestock agents were to become part of PGG-W field staff to source prime stock to SFF's specifications, and the Dunedin meat co-operative would implement a plate to pasture integrated supply chain.
This involved encouraging farmers to produce and deliver products consumers want, when they want it and to their specifications.
Traditionally meat companies started with a production base and fitted the consumer to it.
At last month's vote by farmers, SFF chief executive Keith Cooper said the only obvious sign of change would be the SFF and PGG-W brands on the clothes worn by field staff.
An independent analysis estimated potential annual savings from the partnership of $60 million in the short term and $111 million in the long term.
Just as importantly, the deal injects $220 million in new capital from PGG-W to SFF, which would be used to reduce its $276 million debt and invest in new technology, including robotics.
SFF would process livestock, provide logistics, marketing and branding while PGG-W provided capital, farm inputs and production advice to help farmers change their stock supply patterns, along with animal procurement services.
SFF has been actively scouring the world for new markets, given the competi-tiveness of UK supermarkets and the opportunity provided by new, wealthy, oil-rich markets and growing economies such as China.
A new board would oversee the change, consisting of four directors from SFF, four from PGG-W and current chairman Eoin Garden.
The three others from SFF are Joe Ferraby, Rob Hewitt and Richard Somerville while the four from PGG-W are Craig Norgate, Baird McConnon, Tim Miles and Keith Smith.
Beneath the board was a supplier's council which acts as a conduit between farmers and the board.