LandCorp's decision to bid for the 16 Crafar family dairy farms in receivership could remove a thorny issue for the Government.
The State-Owned Enterprise yesterday decided to formally bid for the farms, but Landcorp chief executive Chris Kelly stressed it was a purely commercial decision, and there was no political pressure for it to do so.
Prime Minister John Key, Agriculture Minister David Carter and Opposition leader Phil Goff have all publicly expressed unease that the strategic dairy assets could be sold to Chinese-backed Natural Dairy, with a bid rumoured to be worth $200 million.
Mr Kelly said in an interview that Landcorp had valued the 13 North Island dairy and three dry-stock farms, and said his bid would be "south of that rumoured figure" but it would be "cleaner".
"If the rumours are true about the Chinese bid, and I have seen the figure of $200 million, then we have had the farms valued, and we have a good idea of values anyway because we have 105 farms. We believe we have a realistic offer, but it will be south of that rumoured figure."
A New Zealand-registered front company for Natural Dairy, UBNZ Assets Holdings, has signed a conditional deal with receivers KordaMentha to buy the farms subject to Overseas Investment Office consent and a Court of Appeal hearing.
The High Court at Auckland last month rejected an application by UBNZ and Natural Dairy (NZ) Holdings that Overseas Investment Office consent was not required.
This has now been appealed to the Court of Appeal.
The Overseas Investment Office said yesterday UBNZ had not lodged an application seeking approval for the purchase.
Mr Kelly said Landcorp would not require approval from the Overseas Investment Office, and provided issues of the Crafar family leaving houses vacant and disputes were settled over land ownership and Environment Court charges, then the offer could be unconditional.
Buying the farms added up commercially, he said.
Landcorp believed it could add value, some of the farms bordered Landcorp properties and could be amalgamated, and Landcorp had management systems for large-scale farm businesses.
The SOE owns 37 dairy farms from Northland to Otago, milking 35,000 cows on 13,000ha, producing 11.4 million kg of milk solids a year.
The 16 Crafar farms would add 8000ha.
The issue of foreign ownership of New Zealand farms has provoked debate, highlighted by controversy when it was revealed UBNZ had already bought four Crafar farms, now subject to an Overseas Investment Office investigation.
UBNZ director May Wang said the company was 80% owned by the New Zealand-based UBNZ Trustee Ltd and 20% by Hong Kong-based Natural Dairy, less than the 25% trigger point for an Overseas Investment Office application.
She said the court hearings and investigation would slow down its Crafar bid, which was part of a proposed $1.5 billion investment in New Zealand dairy farms and dairy processing capacity.
