The tussle between China's biggest agribusiness and Australia's biggest dairy industry family over who gets an extra 9.4 per cent stake in big dairy farming venture Australian Fresh Milk Holdings has ended with both parties taking something home.
Dairy and plant protein processor, Noumi, will be paid almost $30 million as it officially offloads its foundation stake in the farming business today.
Noumi is Australia's biggest long life milk processor whose brands include Australia's Own, Vitalife, So Natural and MilkLab.
Its ties to Australian Fresh Milk Holdings date back to a four-way partnership established in 2015, which has grown into the giant 6200-milker operation, Moxey Farms, in NSW and northern Victoria.
Noumi shareholders last week voted to sell 53pc of its AFMH stake (11.5 million shares) to the Perich family's Leppington Pastoral Company for $16.7m and almost 44pc (8.9m shares) to NewAustralia, a subsidiary of China's big New Hope Group, for $12.9m.
The wash up means the Perich family, which is also a long-time majority Noumi stakeholder and has its own farms running about 2000 dairy cows south west of Sydney, now holds an equal 43.2pc of AFMH with New Hope.
The remaining third stakeholder, the Moxey family at Gooloogong in Central West NSW, stays at 13.6pc.
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AFMH produces 180m litres of milk annually on farms in NSW's Lachlan Valley and near Shepparton in northern Victoria, and has a 4000 hectare Murray River heifer raising aggregation west of Echuca.
This year its farming interests also expanded to include the Ladysmith Feedlot and associated fodder cropping country near Wagga Wagga.
Milk from its farms goes to Noumi, Bega Dairy and Drinks and the A2 Milk Company.
Last month Noumi looked set to sell all its AFMH shares to the Perich's Leppington Pastoral for about $28.6 million, or $1.40 each.
However, New Hope's NewAustralia subsidiary, upped the stakes to offer $1.45 each, giving the shares a total value of $29.65m.
Until now NewAustrlia had been AFMH's largest shareholder by a slight margin, but the parties settled on dividing Noumi's portion to leave both bidders with an equal ownership footing.
Perich investment
In addition to an enlarged AFMH stake, the Perich's have been at the forefront of funding a turnaround in Noumi's business fortunes after the processor almost collapsed under the weight of an accounting and inventory scandal and management shakeup in 2020, which required a $265m recapitalisation.
The Perich family currently holds 52.5pc of Noumi, while former dairy farm manager, Michael Perich, has been managing director since the sudden departure of Rory Macleod two years ago.
The family also owns cropping country at West Wyalong, big parcels of former dairy farmland being developed for housing at Oran Park, part of the Narellan Town Centre shopping precinct and dairy factory assets.
Noumi's exit from AFMH will help pay a total $25.7m in quarterly installments over four years after the company last year settled a legal dispute with US almond marketing co-operative, Blue Diamond Growers, over unpaid accounts and licence fees for use of its brand in Australia.
Good result
Company chair, Genevieve Gregor, said the AFMH share sale would reap a return to the processor at the upper end of an independent valuation which had ranged from $1.32/share to $1.49.
Only 3.1pc of Noumi shareholders opposed the sale at last week's extraordinary general meeting.
If the sell-off had been rejected, Ms Gregor said Noumi would likely have been forced to divert its operating cash flow to fund obligations to Blue Diamond Growers.
"This would not be ideal," she said.
"It would reduce the company's available liquidity and would constrain our ability to fund our transformation and growth initiatives."
About $4.6m left over after covering the Blue Diamond commitment will be used to cover Noumi's other general expenses.
Ongoing challenges
Those expenses include other ongoing legal wrangles with shareholders who launched class actions against Freedom, and coffee merchandiser, Sunday Collab International, which claims Freedom reneged on plans for a MilkLab distribution deal to Europe and wants $24.7m in compensation.
Australian championship surfer, Joel Parkinson, a partner in Sunday Collab who helped negotiate his business' MilkLab plan for Europe, is seeking to recover losses suffered as a result of Noumi allegedly walking away from the 2019 agreement and refusing to communicate further.
Noumi had apparently delivered Milklab products and marketing and packaging materials for brand launches in Italy in late 2019 and at London's Coffee Festival in early 2020.
In a media comment last week Sunday Collab said following Noumi's management and board spill in August 2020, the processor repeatedly denied there was any partnership in place, or any obligation owed to the coffee business.
Noumi has described Sunday Collab's claims as without merit and unsupportable, and said it would defend the action in the Supreme Court of Queensland.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
