Monday, 12 October 2015 10:31

SFF shareholders face farmer or foreign control choice, says MIE

Written by 
MIE chairman Peter McDonald. MIE chairman Peter McDonald.

MIE chairman Peter McDonald says the Silver Fern Farm (SFF) deal may be the last decision of significance that shareholders get to vote on.

SFF's history of being farmer owned and controlled would end abruptly if this joint venture proceeded, says MIE.

The group says SFF voters must understand the motivation from Shanghai Maling through its parent Bright Foods, a SOE of the People's Republic of China.

MIE believe the deal is about security of supply for China by controlling processing and distribution, thereby directing product flows as they see fit.

This is not a decision around the viability of SFF as a business. The SFF board, management and suppliers have shown great discipline to considerably improve the co-operatives trading position.

"This is a refinancing issue not a viability issue for SFF," says McDonald.

"In our view it's a decision initiated by the banks, orchestrated by Goldman Sachs and delivered to shareholders by the SFF board.

"What's needed is a decision by farmers for farmers."

The board of SFF began this process reportedly needing $100 million whilst wishing to retain farmer control.

However, the SFF board have recommended that shareholders cede 50% of the company along with key executive powers.

Farmers all know how important it is to "keep a bit of hay in the shed". Only retaining 50% of SFF has effectively "emptied the hayshed", says McDonald.

"Farmers know that retaining ownership and control of their supply chain is the only way."

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