Foreign investor rules questioned in Riverina agribusiness sale

Foreign investor rules questioned in Riverina agribusiness sale

News
Part of Temora-based BFB's 407,350 tonnes of grain storage capacity.

Part of Temora-based BFB's 407,350 tonnes of grain storage capacity.

Aa

US Private equity to sell Riverina agribusiness BFB to Canadian pension fund

Aa

A group of Riverina farmers is demanding answers from the federal government over the sale of BFB, a large diversified agribusiness in Temora, which is being sold by a US private equity investor to a Canadian pension fund.

A consortium of Riverina farmers, Agrinova, is unhappy BFB’s owners US-based Proterra Investment Partners knocked back its $270 million offer, opting instead for a bid of $200m from Canada’s largest superannuation fund, Public Sector Pension Investments (PSP).

Agrinova has written to the Prime Minister to raise its concerns.

Australia’s Foreign Investment Review Board regulations requires that the sale of foreign-owned land assets is in the national interest, affords equal access to local and foreign bidders, and that the sale process is transparent.

Leader of the Agrinova consortium, former NSW Irirgators chairman and farmer Richard Stott, questioned how the sale could satisfy the FIRB’s national interest test.

“In my observation, the vendor is making a mockery of the Australian agricultural industry and FIRB guidelines, as it now appears that you get a discount on land and assets if you are foreign investor,” Mr Stott said.

Agrinova was advised by Proterra’s advisor, Price Waterhouse Coopers (PwC) on October 16 it was eligible to participate in the due diligence stage of the sale process, after which a binding offer could be made.

However, PwC advised Agrinova on October 26 that it had opted to proceed with Public Sector Pension’s offer.

RELATED READING: 

“I support foreign investment opportunities in the farming sector but this cannot, and ought not, be to the detriment of the normal exercise of the Australian agricultural market in circumstances where Australian agricultural ownership is in question,” Mr Stott said.

A spokesman for PwC said in a statement it could not comment on the deal as the sale process had not been concluded.

The spokesman’s statement asserted that the process had conformed with FIRB regulations.

“In terms of process, the sale process commenced in August and was widely advertised,” the spokesman said.

“A number of criteria are being considered in assessing potential bidders including price. The bidding process has been transparent and all bidders have had access to the same information.”

It is unclear if Public Sector Pension’s bid included additional elements of payment structure, BFB’s employees or other liabilities.

At the time of its listing, BFB was understood to be eyeing expansion plans, which it hoped its new owner would help fund.

BFB comprises a 48,700 hectare dryland grain growing and storage enterprise with a 332,000 tonne grain storage site owned in partnership with Cargill, a pig production operation and fuel and fertiliser distribution operations.

PSP has made a number of significant investments in Australian agriculture.

Most recently, in February, it formed a joint-venture with cropping assets of mining and agribusiness giant, Glencore.

In May last year it took a majority stake in Stahmann Farms, Australia’s largest pecan grower and processor and a major macadamia processor and marketer. 

Aa

From the front page

Sponsored by