Shanghai Pengxin

Random Impertinent Questions about the Lochinver sale

So another party has bought Lochinver station.

Lochinver Station, the 13,843 hectare sheep and beef station near Taupo that China’s Shanghai Pengxin was prevented from buying, has sold to a New Zealand farming group, Rimanui Farms.

No price was disclosed. Shanghai Pengxin had agreed to pay $88 million for the property, adding to an existing portfolio that includes the former Crafar farms.

That sale had been approved by the Overseas Investment Office only to be vetoed by the government.

Mike Bayley, managing director of Bayleys Real Estate, which handled the sale, said a combination of factors meant the property attracted local interest in the property “at a higher value than was the case early last year when we first marketed the station.”

Lochinver had a capital value of $70.6 million and the vendors, the Stevenson Group, had undertaken about $3.5 million of capital improvements, he said.    Read more »

Thanks Paula and Louise, you’ve scared off investors, well done

Shanghai Pengxin has decided to can another farm purchase because of the inane decision of Paula Bennett and Louise Upston.

Another person’s private property rights and value has been eroded due to their idiocy.

A Chinese company has withdrawn from an agreement to buy 10 farms in Northland for about $42.7 million, citing delays and uncertainty from the government’s Overseas Investment Office.

Dakang New Zealand Farm Group, which is 55% owned by Shanghai Pengxin, this morning confirmed the deal was off.

The company had signed a sale and purchase agreement to buy seven dairy farms and three support farms in the Mangakahia Valley district just south of Kaikohe from Mervyn and Cara Pinny.

Dakang  [SZ:002505] chief executive Gary Romano says the decision to cancel was partly based on the government’s decision to veto Pengxin’s purchase of Lochinver Station last month.

“We lodged an application with the Overseas Investment Office (OIO) in April 2015 believing five months would be sufficient time to enable a rigorous and objective review of our plans for the farms, compared to the 70 working day guideline the OIO has for turning around applications,” Mr Romano says.    Read more »

As predicted the Chinese aren’t happy over the Lochinver decision

I said at the time of the Lochinver decision that it would be challenged, and it would reverberate in China as Louise Upston and Paula Bennett made a political decision against the advice of the Overseas Investment Office.

And so it has come to pass.

A Chinese company headed by billlionaire Jiang Zhaobai is actively considering a judicial review of the decision to veto an $88 million application to buy Lochinver station.

Cabinet ministers Paula Bennett and Louise Upston declined the application by a Shanghai Pengxin subsidiary because they did not consider the benefits to New Zealand resulting from the investment to be “substantial and identifiable”.

Lawyers Chapman Tripp are expected to issue a legal opinion to the Chinese firm tomorrow. If the High Court action goes ahead it is expected to test the argument applied in assessing Pengxin’s application.   Read more »

Neville Gibson on the government’s wonky Lochinver decision

Neville Gibson at the NBR comments on the government’s failure to protect private property rights and make decisions for political not business reasons.

At some time in the life of a government a single decision can be seen in retrospect as a turning point that may seal its historic reputation.

One of those occurred yesterday when the cabinet endorsed the decision of two government ministers to overturn fundamental property rights and signal the political interests of the state were supreme.

The blocking of the Lochinver Station sale to a Chinese-owned company, Pure 100 Farm, will cast a long shadow over future foreign investment proposals.

The story has already been featured prominently in the Wall Street Journal (“NZ blocks big Chinese land deal”), where readers won’t be too concerned about the domestic political niceties.

All they will see is that land cannot easily be bought in New Zealand. Read more »

Those who are named a bit Chinky are feeling a bit stinky

The OIO said there were no impediments to Chinese ownership according to the rules, but National have decided to not hand the Media Party and Labour another stick to beat them with.

It may appear good strategy, but it is yet another example that National is operating with less principles and are now a mad poll driven bunch of fruitcakes.

After a 14-month wait for Government approval, the $88 million sale of Lochinver Station to Chinese buyers has been blocked.

“We will not be approving that application,” Associate Finance Minister Paula Bennett said today.

Government ministers overruling the Overseas Investment Office refused to sign off, instead stamping “consent declined” on the deal.

Lochinver is a massive 13,800 hectares, but the sale to Shanghai Pengxin may have provided just three new jobs and Ms Bennett said that didn’t pass the test.

“[It’s] 35 times bigger than your average farm, and to turn around and think – potentially one job and a couple of contractors, is that an identifiable and substantial benefit to New Zealand?”

The decision is a big call against powerful China but Ms Bennett isn’t worried.

“I’ve got no idea how the Chinese government will feel,” she said.

Read more »

Watch the Chinese backlash as political decision over Lochinver Station gets messy

10379446

The Lochinver Station sale has been nixed by government ministers.

The company hoping to buy Lochinver Station, near Taupo, is “surprised” and considering its options after the Government rejected its application.

Ministers rejected the $88 million bid from Pure 100 Farm Ltd – a subsidiary of Shanghai Pengxin – to buy Lochinver because the benefits to New Zealand were not “substantial and identifiable”. That was despite Overseas Investment Office recommendation it be approved.

“The improvements we have made to existing assets are well known,” the company said.

“Pengxin has spent more than $18 million, since settlement, to improve the productivity and environment of the former Crafar farms to new historical levels.

“We are surprised and extremely disappointed with the decision and will be considering our options.”

Shanghai Pengxin, 99 per cent-owned by Chinese rich-lister Jiang Zhaobai, had a conditional agreement to buy the station for $88m from owner Stevenson Group.   Read more »

The benefits of foreign investment

There were campaigns trying to prevent Shanghai Pengxin from acquiring the Crafar farms. Politiciand from David Shearer and Phil Goff to Winston Peters interfered as well. Then there were the legal battles from people trying to prevent the sale of the decrepit Crafar farms to Chinese company Shanghai Pengxin.

Winston Peters also famously slurred their name in one presumably drunken rant in parliament.

But all the naysayers are being proved wrong as Shanghai Pengxin has literally plowed millions of dollars in to the farms to turn them from dogs to diamonds.

ONE OF the biggest achievements of the Shanghai Pengxin renovation of a former Crafar dairy farm near Hamilton is peace with the neighbours and community.

A while back, Jason Colebourn who manages the Collins Rd property for Pengxin’s sharemilker Landcorp, says he wondered if the local customary wave was a one-fingered salute, so often did he get one when working on the farm whose environmental calamities helped spur the collapse of the 16-farm Crafar dairying empire six years ago.

Colebourn moved onto the farm one year into the receivership of the Crafar farm estate and for two more years until the sale to the Chinese company was finalised, the Collins Rd property would remain an eyesore.

Pengxin has bankrolled the Collins Rd farm resurrection for $1.72 million and counting.

Colebourn and his five staff have supplied the brains and brawn to turn what was by all accounts a train wreck into an operation which this season will produce 365,000kg milk solids and is  turning a profit for its owner.

Read more »

This should get Winston, the xenophobes & the Crafar naysayers going

Surely Winston, Labour and the Greens are going to cut up rough about a Chinese billionaire wanting to buy up more land and invest in new businesses.

We need more people like this rather than fat German crooks.

Chinese billionaire Jiang Zhaobai, who now owns the Crafar dairy farming empire, is back in New Zealand forging a relationship with Maori and looking for further deals in the dairy and hotel industries and in Christchurch.

Mr Jiang, ranked 82 on the Forbes China rich list, flew into Auckland early last Saturday and later that day attended the Taniwha and Dragon Festival at Orakei Marae.

Mr Jiang, whose personal wealth is estimated at US$1.2 billion, was invited to the festival by Maori Affairs Minister Pita Sharples when the pair met up during the recent John Key-led trade visit to China.  Read more »

Crafar Farms deal settled

The Crafar Farms deal settled yesterday. Shanghai Pengxin issued the following statement:

Two years after it made a successful bid for the 16 North Island Crafar farms, Chinese company Shanghai Pengxin has withstood all legal challenges and finally been able to settle on the properties and take possession.

The properties, have been purchased in the name of a subsidiary company, Pengxin New Zealand Farm Group. They will be managed by a new joint venture company, Pengxin New Zealand Farm Management Ltd, a 50/50 joint venture with Government-owned Landcorp, which will be the managing partner, and which is increasing staff numbers to run the 16 farms.

The 13 dairy farms and three dry stock farms total almost 8,000 hectares and currently carry some 16,000 cows. The company is committed to investing $15.7 million in the next three years to upgrade the properties and increase milk production, which will initially be sold to Fonterra.

Great stuff, now we can get on with the other aspects of the deal opening up new access and markets in China.

Opportunists given the arse card

Michael Fay’s opportunist Maori mates have been given the arse card by the courts:

Chinese company Shanghai Pengxin hopes to settle its purchase of the 16 North Island Crafar farms before early December, after the Supreme Court threw out the last obstacle to the deal, an appeal by Maori trusts.

Pengxin, preferred bidder of KordaMentha, receivers for the dairy farming estate, has had to wait through 18 months of legal challenges and protests against the purchase, which ended today when the court refused to allow a further legal appeal by central North Island iwi.

Tiroa E and Te Hape B Trusts, which have been negotiating unsuccessfully to buy two of the Crafar farms at Benneydale, considered ancestral land, had asked the Supreme Court for leave to appeal Pengxin’s purchase consents by the Overseas Investment Office and the Government, upheld by the High Court and Court of Appeal.