Shanghai Pengxin rejection hurts Lochinver neighbour

The government's decision to reject Shanghai Pengxin as the Lochinver Station buyer had a flow-on effect to the neighbouring farm.

It has failed to sell and has been put back on the market after the rationale disappeared for Shanghai Pengxin to acquire the dairy farm.

Taharua Farm is a 1235 hectare dairy farm neighbouring Lochinver, the 13,843 hectare central North Island sheep and beef station. Shanghai Pengxin had an agreement to buy Taharua Farm dating back to just after the time it was first looking at Lochinver. 

Its owner, Fleming & Co, as trustee of the Country Spirit Trust, sold the farm's livestock, equipment and shares to Shanghai Pengxin and leased the farm to the Chinese company in June last year. The lease expires at the end of May.

In September, the government scuttled Shanghai Pengxin's $88 million proposed purchase of Lochinver, saying the transaction failed on the test of providing a substantial benefit to New Zealand.

A month later Fleming & Co was put into receivership by ASB Bank, owing about $17.8 million. Liquidators were appointed in early November.

Lochinver was sold in November to a New Zealand farming group, Rimanui Farms. No price was disclosed.

Tenders for Taharua Farm close on March 10. The farm is being marketed by Bayleys Real Estate, the same real estate company that handled the Lochinver sale.

"Our preference is to own clusters of farms, for logistical reasons," says Shanghai Pengxin spokeswoman Clare Bayly. Taharua "was really attractive when Lochinver was an option. When that fell through, a lot of that changed."

She says the decision to withdraw from buying Taharua was made by Shanghai Pengxin and the vendor, "who shared our concern about the uncertainty of the Overseas Investment Office process."

The advertisement for Taharua says it has two 80 bale rotary cowsheds and carries about 2500 cows producing about 700,000 kilograms of milk solids a year.

Another Shanghai Pengxin unit, Dakang New Zealand Farm Group, withdrew an application to buy seven dairy and three support farms in Northland from Pinny Farms, the region's largest milk supplier, in October, citing the OIO's slow progress on the request and the company's experience trying to buy Lochinver Station.

(BusinessDesk)