2 Oct 2008

Milk plant project postponed due to funding delays

10:17 am on 2 October 2008

Another rural-based company is feeling the global credit crunch.

Delays in securing funding have forced Mataura Valley Milk to postpone a $90 million dairy processing plant near Gore, in Southland.

The company says construction is being put on hold for a year, until 2010.

Mataura says delays in closing funding meant it risked missing the start of the 2009 milking season.

After discussions with its fund providers, it says it is confident planning for the processing plant will be re-started next year.

Mataura says the demand for high quality New Zealand dairy products will remain strong, despite recent events in China.

PGG Wrightson - Silver Fern Farms

PGG Wrightson announced on Wednesday that extreme financial market conditions have prevented it from buying a 50% stake in meat processor Silver Fern Farms, formerly known as PPCS.

PGG Wrightson was to pay $220 million for its stake in the co-operative and was due to make a $145 million payment on Tuesday. The remaining $75 million is due in March next year.

However, it has advised Silver Fern Farms that it cannot make the payment because of the current instability in global and domestic financial markets.

PGG Wrightson chairman Craig Norgate told Morning Report both companies are cautiously working hard to go forward with the purchase.

He said he is confident a deal can be finalised by the end of October.