Silver Fern shareholders vote today on China deal

Shen Wei Ping of Shanghai Maling. Silver Fern farm co-op members are voting today on a 50/50 joint venture deal with the Chinese investor. Photo / Nick Reed.

Silver Fern Farms shareholders will revisit the controversial joint-venture with China's Shanghai Maling at a special meeting of the co-op in Dunedin this afternoon.

The Overseas Investment Office said last week it had received the information it required from Shanghai Maling and was considering its application.

The office had said previously it had delayed making a recommendation to the relevant ministers - Louise Upston and Paula Bennett - on the $261 million deal pending receipt of more information.

Silver Fern Farms chairman Rob Hewett has said the board remained unanimous in its view that the 50/50 partnership with Shanghai Maling was in the best interests of shareholders and the co-operative.

In October 2015, shareholders approved the partnership with Shanghai Maling with 82 per cent of votes cast in favour.

"If anything, the imperatives and potential benefits for Silver Fern Farms from this transaction have increased since then," Hewett said in a notice of meeting.

Lamb prices have been under downward pressure since the first vote, and Britain's surprise vote to exit the European Union is being seen as an additional problem for the rapidly shrinking sector.

We are frustrated and disappointed that Messrs Shrimpton and Gallagher have encouraged a small group of shareholders to question the approval obtained last year...

Silver Fern Farms chairman Rob Hewett

Beef and Lamb New Zealand said this week that New Zealand's beef cattle herd increased by 2.8 per cent to 3.7 million during the 2015-16 season - but that the country's sheep flock decreased 3.0 per cent to 28.3 million.

Breeding ewe numbers fell across all regions of New Zealand and are down by 3.1 per cent overall. Beef and Lamb said the lamb crop is expected to be down by 2.9 per cent, to 23.3 million - or 700,000 fewer than last season.

Opposing Silver Fern Farms shareholders John Shrimpton and Blair Gallagher have garnered enough interest from farmers to look again at the transaction at this afternoon's meeting.

"We are frustrated and disappointed that Messrs Shrimpton and Gallagher have encouraged a small group of shareholders to question the approval obtained last year, that they have required the co-operative to hold this further special meeting, and that they are continuing to agitate for the transaction to fail," Hewett said in the notice.

Silver Fern Farms - New Zealand's biggest meat processor - has cited its pressing debt load as a compelling reason for pressing ahead with the transaction. Its main bankers are Westpac, HSBC, Commonwealth Bank of Australia and Rabobank.

The company is a "hybrid" co-operative and has shares that are quoted on the "Unlimited" trading platform.