Waterford-based Dawn Meats’s NZ$250 million (€124 million) offer for a controlling stake in New Zealand meat co-operative Alliance Group has got the green light from the country’s Overseas Investment Office (OIO).
The approval is the last regulatory hurdle for Dawn Meats to clear in advance of a final vote by the co-operative’s 4,300 farmer shareholders on October 20th.
An OIO spokeswoman said the approval was contingent on a commitment to keep open all six of Alliance’s processing plants.
It also calls for a minimum NZ$22.5 million of capital expenditure as well as “conditions that cover the use of the residential land associated with some of the plants”.
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The spokeswoman said the full approval would be published at the end of this month.
Alliance Group chairman Mark Wynne said the OIO required NZ$10 million to be spent within 12 months of Dawn buying into the meat processor.
Possible uses for the cash included automated meat processing and energy and water efficiency projects.
The approval comes as Mr Wynne and his fellow Alliance directors embarked on a hectic schedule of 21 shareholder meetings in 12 days to round up support for Dawn’s offer.
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That task was made harder by a group of prominent shareholders last month, who published a letter calling for the offer for 65 per cent of the co-operative to be rejected.
The group says farm returns have improved dramatically since farmers were last called on to recapitalise the co-operative a year ago.
The group is calling on shareholders to contribute NZ$90 million of new capital over three years to help repay NZ$188 million of bank debt. The rest would come from retained earnings and land sales.
However, The Irish Times understands the group has been unable to test the proposal with Alliance’s banking syndicate, who refuse to meet them.
Asked whether the Alliance board had offered to act as an intermediary for the group, Mr Wynne said it had not.
He said the banks had set a hard deadline of December 19th for full repayment, which had already been extended once to allow the vote on the Dawn offer to proceed. Payment by Dawn is due on November 28th.
“The letter is an idea and the banks need a commitment because unless that money is paid or that timeframe is extended it cannot be an IOU and we will try hard.
“If the idea can morph into a realistic binding commitment that puts the discussion into a different framework but we are running up against the timeline now,” Mr Wynne said.
