China Eximbank provides loan to facilitate acquisition of 75% ownership stake in Prime Range Meats Limited by Shenzen Lianhua Enterprise Development Co.

Project narrative

In 2014, the Shenzhen Branch of the Export-Import Bank of China signed a loan agreement with Lianhua Trading Group Limited — a special purpose vehicle (SPV) — to facilitate its acquisition of a 75% ownership stake in New Zealand meat processor Prime Range Meats Limited (PRM). Lianhua Trading Group Limited previously held a 24.9% stake in PRM. China Eximbank's loan supported the $7,929,728 NZD acquisition of an additional 50.1% in PRM from current shareholders One Muff Too Tough Trust and Tulloch Property Trust and A M Forde Family Trust and Tulloch Holding Trust, both entities 50% owned by the Tulloch and Forde families, respectively. The New Zealand Overseas Investment Office approved this deal on November 4, 2014. Lianhua Trading Group Limited is a SPV and wholly owned subsidiary of Chinese company Shenzhen Lianhua Enterprise Development Co., Ltd. Shenzen Lianhua Enterprise Development Co. It was established in early 2014 to invest in New Zealand's beef and mutton industry. The deal required approval from the Overseas Invesment Office because PRM's assets included 99 hectares of land at Waikiwi used for holding stock; some of this land is in sensitive wetlands and bush. The capital injection and acquisition of the 75% stake in PRM was completed on November 22, 2014, during Chinese President Xi Jinping's visit to New Zealand. The acquisition was expected to lead millions of dollars of capital expenditure for PRM and an increase in the number of jobs from 120 to about 170. PRM was expected to become a new means of exporting of high-quality meat products to China. However, the acquisition did not go swimmingly. In February 2016, during the peak of meatpacking season, the PRM plant in Invercargill was forced to close for two weeks after running out of working capital; during this time period, the 170 staff on site received no communication from Lianhua and it was unclear whether the plant would reopen. The intervention of two New Zealand shareholders and directors, Tony Forde and Inky Tulloch, led to funding and the reopening of the plant. In late 2016, Cuilam Industry Limited (a Chinese company) moved to acquire 100% of the shares in Linhua Trading Group Limited for $13,518,000 NZD from Shenzhen Lianhua Enterprise Development Co., Ltd. The transaction was approved by Overseas Investment Office on December 2, 2016. As a result of this transaction, Cuilam Industry took over Lianhua's 75% stake in PRM.