Dairy business owes $36.5m

Dave Heffernan. PHOTO: SUPPLIED
Dave Heffernan. PHOTO: SUPPLIED
A large-scale dairy farming enterprise — which includes two farms in North Otago — owes the Bank of New Zealand about $36.5 million, a recent High Court judgement says.

In April, Andrew Grenfell and Kare Johnstone were appointed by the BNZ as receivers and managers of the property of Waitonui Milltrust Agricultural Holdings Ltd Partnership, Waitonui Milltrust Agricultural Holdings Farm Management Ltd Partnership, Waitonui Milltrust Agricultural Holdings General Partner Ltd and WMAH Farm Management General Partner Ltd.

Both Burnside Dairy Farm and Elderslie Dairy Farm, inland from Oamaru, were put on the market to be sold by deadline sale, with offers closing last Friday.

PGG Wrightson real estate agent Dave Heffernan said yesterday it had been a "short sharp" marketing campaign and good interest had been shown, with three offers for the Burnside property and five for Elderslie.

Burnside is a 505.3ha property with an adjoining 81.9ha lease, giving a total effective milking platform of 550ha. The property had milked 1600-1750 cows with a three-year average of 642,000kg MS under a high input continual supply dairy farm and had recently transitioned to a more conventional grass-based lower supplementary feed input dairy farm.

Elderslie is a 598.8ha property with an effective milking platform of 552.5ha. It had, in the past, run as a continual supply dairy farm. It recently transitioned to a conventional dairy farm with about 500 cows being milked through winter. It had a three-year production average of 584,150kg MS.

The New Zealand Herald reported the receivership was complex because the Waitonui group leased land and livestock from third parties which were not in receivership — Stockco Capital and WMAH LP (Spv 3) Ltd.

The latter was put in liquidation on May 9 by resolution of its shareholder, Waitonui Milltrust Agricultural Holdings LP, one of the entities included in the Waitonui receivership.

The two receivers successfully applied to the High Court to excuse their receivers’ liability due to risks associated with the leases.

In a judgement delivered by Justice Pheroze Jagose, the leases risked the receivers’ personal liability, including a near $7m "balloon payment", due tomorrow if they were unable to abandon the land or livestock.

Proper attendance to animals’ welfare was a primary consideration, Justice Jagose said.

The judgement said the group operated large dairy farming enterprises in the central North and South Islands, grazing some 5000 cattle on more than 2000ha. At the time of the receivers’ appointment on April 15, the group owed the bank some $36.5m.

In 2019, Milltrust International and its affiliate Milltrust Agricultural Investments announced the acquisition of a 24.9% equity holding in Waitonui Milltrust Agricultural Holdings, a newly-established entity owned in conjunction with a consortium of New Zealand investors. At that time, it said WMAH had total assets of more than $125m and it was one of Fonterra’s largest suppliers.

In November, 2021, Milltrust International Group exited its involvement in the agricultural sector through the sale of Milltrust Agricultural Investments to Future Planet Capital.

While Waitonui Milltrust Agricultural Holdings included and retained the Milltrust name, Milltrust International Group no longer held any shareholding or management role in Waitonui Milltrust Agricultural Holdings, Milltrust clarified in an announcement following confirmation of the receiverships.

The Herald reported Future Planet today has a 24.9% shareholding in Waitonui Farm Management and Waitonui Milltrust Agriculture Holdings General Partner. The largest single shareholder of both entities with 27.99% of each is Gerard Donald, from the Waikato.