By Pattrick Smellie
WELLINGTON Dec 1 BusinessDesk - Canterbury dairy producer and processor Synlait is looking to shed as much as 70 per cent of its holding in Synlait Farms, with potential for the 4,820 hectares of prime, irrigated Canterbury dairy farmland to be sold to offshore buyers.
However, chairman Barry Brook says there was "significant interest from potential New Zealand investors as well as offshore", and it was "unlikely" that the 51 per cent Chinese owner of sister company Synlait Milk, Bright Dairy, would be a bidder.
Synlait Milk, which opened a $100 million high-value milk powder plant at Dunsandel last week, brought Bright on board last year after failing to raise capital in a share float offered to New Zealand investors last year.
A float for the farm-owning subsidiary had not been contemplated, Mr Brook said.
Synlait was expecting to realise around $70 million from the proposed transaction, which would see Synlait Farms and Synlait Milk operate independently in the future with different shareholders, while maintaining a "strong customer-supplier relationship", said Mr Brook.
Brook said Synlait's three founding shareholders, John Penno, Juliet Maclean, and Ben Dingle intended to remain shareholders in the farming company, but that the decision to offer a large, majority shareholding was in part motivated by the desire of some other shareholders to exit the business.
The proposed sale places another large block of dairy land on the market, along with the so-called Crafar farms, which are in receivership and mired in a prolonged Overseas Investment Office approval process, a suite of central North Island farms owned by Carter Holt Harvey, and the dairy portfolio of Dairy Holdings, which is part of the realisation process following the collapse of the empire built by Allan Hubbard, of South Canterbury Finance.
NZN