New Zealand Farming Systems Uruguay - at present under a $110 million takeover offer - has been granted a $NZ28 million-$NZ35 million tax concession under Uruguayan financial laws.
The up to $35 million estimated tax benefits, part of a wider $58 million package over time, will be available to offset NZFSU's tax liability after it becomes profitable, which is anticipated to be in the 2011-12 financial year, chairman John Parker said in a market statement yesterday.
NZFSU's share price was further boosted yesterday - up 1c to trade at 57c - having this week jumped almost 35% following the takeover offer from 41c to trade above 55c.
Mr Parker said aside from earlier construction jobs, NZFSU had created about 400 jobs in rural Uruguay in 31 milking sheds.
It also held land stocks for future development.
"We are delighted the Government of Uruguay has recognised the beneficial impact of our operations, in keeping with its established policy to promote investment," Mr Parker said.
Craigs Investment Partners broker Peter McIntyre said the tax concession was "very positive" news for NZFSU, and especially so with the Uruguayan Government publicly supporting the investment.
Singaporean-based based Olam International launched a $110 million takeover offer on July 19.
The offer, which closes on September 24, would require 50% shareholder acceptance to go through.
The offer was prompted after Olam bought PGG Wrightson's 11.5% stake in NZFSU, taking its stake to almost 30%.
