Overseas investment decision for case 201220039 - Craigmore Sustainables (Farming) N.V

An overseas investment in sensitive land, being the Applicant's acquisition of up to 95% (by 30 June 2016) of the securities in Craigmore Farming NZ LP (the Issuer) which indirectly owns or controls (via subsidiaries that are at least 80% and up to 100% owned by the Issuer) freehold interests in approximately:

• 1,744 hectares of land located at Kururau Road in Taranaki (Te Moata Farm);
• 1594 hectares of land located at Mangapoike Road in Gisborne, (Te Puna Farm);
• 323 hectares of land located at Pahau Reserve Road in Canterbury (Pahau Flats Farm);
• 109 hectares of land located at Broadside Road in Canterbury, (Broadacres Farm); and
• 460 hectares of land located at Hinds River Road in Canterbury (Wairepo Farm).

An overseas investment in sensitive land being the Issuer’s (or its at least 80% and up to 100% subsidiary’s) acquisition (pursuant to an existing conditional contract) of a freehold interest in approximately 423 hectares of land located at Pahau Reserve Road in Canterbury (Landsend Farm).

An overseas investment in significant business assets, being the Applicant's acquisition of rights or interests in 95% of the securities in the Issuer, the value of the assets of the Issuer and its 25% or more subsidiaries being greater than $100m.

An overseas investment in sensitive land that may occur where the Issuer divests of a minority interest (no greater than 20%) in any of its subsidiaries for the purpose of introducing equity managers as anticipated in its Business Case, and then subsequently reacquires all or part of that minority interest on the exit of an equity manager, provided the reacquisition occurs by 30 June 2016.

Craigmore Farming NZ LP
Forbes Herbert Elworthy, New Zealand (66.7%)
Mark William Cox, New Zealand (8.53%)
The Applicant (24.77%)

Andrew and Anthony Dalzell
New Zealand (100%)

The strategic objective of the Issuer is to generate superior long-term risk-adjusted returns by financing, acquiring, developing and improving management of its farming operations. The introduction of further capital by the Applicant will allow the Issuer to invest in on-farm development and beneficial land-use change.

The overseas investment transaction has satisfied the criteria in sections 16 and 18 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(i) – Creation/Retention of jobs
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Added market competition/productivity
17(2)(a)(v) – Additional investment for development purposes
17(2)(a)(vi) – Increased processing of primary products
17(2)(b) – Indigenous vegetation/fauna
17(2)(e) – Walking access
17(2)(f) – Offer to gift riverbed to the Crown

Overseas Investment Regulations 2005
28(a) – Consequential benefits
28(d) – Owner to undertake other significant investment
28(e) – Previous investments
28(f) – Advance significant Government policy or strategy
28(g) – Enhance the viability of other investments
28(i) – Economic interests
28(j) – Mitigating factor