Speculation is rife that NZ Dairies will be bought by Oceania Dairy

Locals set to buy NZ Dairies back off Russians as debt woes grow

It was one of the first dairy processing plants built that took advantage of dairyings rapid expansion. But money troubles continued to plague its progress, with the development costing much more than was planned.

 To finance this shortfall, a shareholding was granted to an outside Russian investor. This irked a major dairy supplier and original investor and this story festered for many months. The Russians subsequently achieved a full takeover of the company.

Now it appears the parent company is in financial difficulties and the full circle maybe being turned, with ownership possibly returning to Kiwi interests, Dairy News reports.

After months of speculation it seems Oceania Dairy is set to bid for New Zealand Dairies’ plant at Studholme, South Canterbury, rather than set up in competition just down the road. Early this year Oceania offered farmers and investors 23 million shares in an attempt to raise $7m. The deadline for that capital raising was extended by a month to March 31 and subsequent dates set for statements as to the outcome have repeatedly rolled by with no concrete comment.

However, Dairy News now understands Oceania has sufficient financial backing from a mix of supplier investors and institutions to mount a bid for Russian-owned NZDL.It seems such a move would go down well with at least some of the farmers in the area.“I’d rather see one strong operator in the district than two small ones trying to wreck each other,” says one.

Reports Nutritek faced bankruptcy in April unless it could avert a $US368,000 ($NZ526,000) lawsuit from a creditor refusing to agree to restructure its credit have fuelled speculation here NZDL will be for sale. On May 19 Nutritek said it had accepted the resignation of Group chief executive officer Jim Dwyer and that he had been replaced by former chief executive Oleg Ochinsky. Dwyer said he had completed the role he was engaged for and was moving on to other opportunities within the Russian market.