New Zealand's biggest meat cooperative and China's biggest meat processor have agreed to postpone their tie-up deal by three months as New Zealand regulators continue to assess it.
Silver Fern Farms said the new deadline for gaining regulatory approval for the 50-percent sell down to Shanghai Maling Aquarius Co. Ltd. (Shanghai Maling) was now Sept. 30.
Silver Fern Farms was unable to meet original date of June 30 because New Zealand's Overseas Investment Office (OIO), which vets foreign purchases of New Zealand assets, was seeking more information on the deal, chief executive Dean Hamilton said in a statement Friday.
OIO approval was the only outstanding condition in the sell-down, but more time was also needed for government ministers to consider the application, said Hamilton.
"We continue to believe that the investment will be approved given its substantial merits," he said.
"The agreement to the new date reflects positively on the ongoing commitment of both parties to the transaction."
On the basis of the revised OIO date, the parties had agreed to a completion date of Jan. 4, 2017.
The deal has been beset by controversy with Silver Fern shareholders staging a revolt and demanding a new vote on its approval after claiming the board and executives misled them on its debt levels.
The board has vowed to ignore the result of the second vote, which was set for July 11, but it also announced Friday that the special meeting for the new vote had been put back to Aug. 12 so it could update materials in view of the new OIO condition date.
The Financial Markets Authority (FMA), the market watchdog, in May cleared the board of issuing misleading or deceptive documents, but New Zealand lawmakers who lodged the complaints described the investigation by the FMA as "less than competent."
The complaints said documents led shareholders to believe only weeks before its financial year-end balance date that the sale to Shanghai Maling was necessary to prevent receivership or liquidation.
However, 25 days after voting, shareholders learned that net profit after tax was 85.8 percent higher than in the document, while the debt range in the document was overstated.
In October last year, shareholders voted 82.22 percent in favor of selling a half stake to Shanghai Maling, which is 38-percent owned by China's Bright Food Group, for 261 million NZ dollars (186.59 million U.S. dollars).