The Government won't be lending nearly $10 million to struggling Westland Milk Products, following news it is likely to be sold to a Chinese company.
The loan of $9.9m was to come from the Provincial Growth Fund, but the MBIE unit overseeing grants to the regions said it had suspended negotiations to close the loan deal.
Westland, a long-established farmer-owned cooperative has signed a conditional agreement to sell to Hongkong Jingang Trade Holding otherwise known as Inner Mongolia Yili Industrial Group for $588m.
Provincial Development Unit head Robert Pigou said the the unit had been mindful of the possibility the company would change hands.
Regional Development Minister Shane Jones' office said a firm contract had never been signed with Westland and a clause had been inserted from the start of negotiations providing for the loan to be called off if there was a change in the company's situation.
