Overseas investment decision for case 201320091 - SFL Holdings Limited

Consent has been granted to SFL Holdings Limited, or a 100% subsidiary of SFL Holdings Limited, acquiring a freehold, leasehold or other interest in:

• a deemed Stewardship Area under section 62 of the Conservation Act 1987;
• part of the bed of the Rakaia River, being Crown land under the Land Act 1948; and
• a paper road vested in the Selwyn District Council along with other paper roads;

which will result in overseas investments in sensitive land.

The Applicant is seeking consent to acquire sensitive land under the Act.

The Applicant, pursuant to application number 201320041, has made a takeover offer under the Takeovers Code for all of the shares in Synlait Farms Limited. Synlait Farms Limited owns 13 dairy farms, comprising approximately 4,559 ha in total (4,471 ha freehold, 88 ha leasehold).

In conjunction with application number 201320041, it was discovered that Synlait Farms Limited was informally occupying certain areas of Crown and territorial authority owned land. The Applicant has therefore sought consent to ‘regularise’ the occupation of these areas.

The overseas investment transaction has satisfied the criteria in sections 16 and 18 of the Overseas Investment Act 2005. The s16(1)(e)(ii) 'benefit to New Zealand' criterion was satisfied by reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(i) – Creation of jobs
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Greater productivity
17(2)(a)(v) – Additional investment for development purposes
17(2)(a)(vi) – Increased processing
17(2)(b) – Indigenous vegetation/fauna

Overseas Investment Regulations 2005
28(e) – Previous investments
28(f) – Advance significant Government policy or strategy
28(i) – Economic interests
28(j) – Oversight and participation by New Zealanders

Ministers considered that the benefit under s16(1)(e)(ii) is likely to be substantial and identifiable under s16(1)(e)(iii) having regard to the relevant factors listed above collectively, and having particular regard for the following factors:

• The creation of six and a half full time equivalent jobs and various contracting jobs (s17(2)(a)(i));
• The introduction into New Zealand of $6,012,000 from overseas for development purposes (s17(2)(a)(v));
• Previous investments that have been, or are, of benefit to New Zealand, being Milk New Zealand Holding Limited’s overseas investment in 16 North Island farms and Juliet Maclean and John Penno’s establishment of Synlait Farms Limited and Synlait Milk Limited (r28(e)); and
• The giving effect to or advancement of the NZ Inc China Strategy (a significant Government strategy) (r28(f)).