Canadian bid for South Island farmland rejected by OIO

Credit: Original article can be found here

A Canadian bid to buy more than 4500 hectares of South Island farmland has been rejected by the Overseas Investment Office.

The office (OIO) ruled Mercury Agriculture LP, 92 per cent owned by Canadian interests, could not buy more the land in South Canterbury and Otago because it was “not in New Zealand’s interests”.

Mercury had applied to buy up to a 68.3 per cent interest in Rangitata Dairies Limited Partnership and Rangitata GP Limited, which owns close to 2000ha at Rangitata near Geraldine,  212ha near Temuka,  494ha near Ashburton and 816ha near Cromwell.

All the land was classified as sensitive under the Overseas Investment Act because it was farmland.

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The Overseas Investment Office ruled the bid by foreign-owned Mercury Agriculture LP was 'not in New Zealand's interests'. (File photo)

KELLY HODEL/STUFF

The Overseas Investment Office ruled the bid by foreign-owned Mercury Agriculture LP was ‘not in New Zealand’s interests’. (File photo)

Such sensitive land is identified as potentially offering substantial and identifiable benefits to New Zealand.

The price offered was withheld.

However, Land Information Minister, Eugenie Sage, and Associate Finance Minister David Clark decided against the sale.

According to the OIO decision, for consent to be granted, the ministers needed to be satisfied the investment would result in substantial and identifiable benefit to New Zealand.

Associate Finance Minister David Clark announced last month a new national interest test would apply to sales of the most sensitive and high-risk assets to overseas buyers.

TOM LEE/STUFF

Associate Finance Minister David Clark announced last month a new national interest test would apply to sales of the most sensitive and high-risk assets to overseas buyers.

Neither minister had been satisfied the investment met those requirements, it said.

Mercury Agriculture is an investment vehicle for Fiera Comox Partners which established a fund to buy agricultural land and rural producing assets in New Zealand, Australia, Canada and the United States, the office said.

Rangitata Dairies owns eight dairy farms in South Canterbury, a dairy support farm in Otago and leased farmland used as dairy support in Canterbury.

It planned to use proceeds from the sale to convert 111ha of farmland into an orchard, plant permanent crops and install irrigation and in-shed feeding on some of the dairy farms.

Associate Finance Minister David Parker announced last month a new national interest test would apply to sales of the most sensitive and high-risk assets to overseas buyers.

The changes were designed to better manage risks posed by overseas investment while cutting unnecessary red tape and encouraging productive overseas investment in New Zealand. 

A bill would be introduced early next year, Parker said.

Stuff