Pengxin given chance to improve bid

Chinese firm Shanghai Pengxin's chances of gaining Overseas Investment Office approval for its bid for the Crafar farms have been boosted as the office says the company can tweak the offer to make it more acceptable.

This week, in an embarrassment to the Government, Justice Forrie Miller overturned ministerial endorsement of the OIO's original decision to approve the bid.

That meant the office must reassess the bid's economic benefits to New Zealand to ensure they would exceed those that would ensue if local interests bought the farms.

Yesterday, a spokeswoman for the OIO confirmed Shanghai Pengxin would be allowed to alter the terms of its application in light of Justice Miller's High Court ruling.

The Sir Michael Fay-led group, whose own offer of $171.5 million was rejected by the farms' receivers as too low, yesterday submitted details of its own plans for the farms to the OIO for comparison. The group includes iwi.

A spokesman for the group, Alan McDonald, said the details were submitted to the OIO "to ensure there was no doubt anywhere that Shanghai Pengxin was not the only option available for selling the farms".

"With details of the Shanghai Pengxin offer, and the conditions imposed by the OIO finally made publicly available, the group believes it is important to show New Zealanders that our Kiwi offer betters Shanghai Pengxin."

The submission details plans to spend at least $18 million "to bring the farms up to optimum condition and maximise production while the ancestral links our iwi buyers have with some of this land will ensure restoration and access to the important historic sites", Mr McDonald said.

However, receiver Brendan Gibson has made it clear that having rejected the Fay offer, the OIO had only one bid on the table.

The OIO spokeswoman said it was too early to say whether the Fay group's submission would be considered.

"The submission will need to be provided to [Shanghai Pengxin's] solicitors for comment in accordance with our usual practice."

Shanghai Pengxin spokesman Cedric Allan described the Fay group submission as "slightly Alice in Wonderland because there is only one offer for these farms".

Mr Allan said Shanghai Pengxin had been invited to make fresh submissions of its own by OIO, "and they most certainly will be doing that".

Mr Allan believed the OIO might now look at the economic benefits of Shanghai Pengxin's plans to process the milk produced on the farms and sell the resulting products in China, factors he believed the office may not have considered in its original consideration.

That was because the office believed the increase in milk production promised by the company was of sufficient economic benefit in itself to satisfy legal requirements.

He said Shanghai Pengxin was "stunned by the amount of apparent anti-Chinese feeling" that its bid had generated.