Today I see news that a company called Dakang Muye (大康牧业) is planning to spend 2.3 billion to buy two New Zealand farms. Exactly how big a sum 2.3 billion is depends, of course, on which currency we’re using. I think it safe to assume from context that the currency is Chinese Yuan/Renminbi. In which case, 2.3 billion would translate to NZ$ 457,613,434.77. Now, I have no idea how that link to XE.com will work, but that is the figure I was given. Also, I googled “大康牧业”, and among all the news articles was a site that looked like it might belong to the company, but AVG gave me a big, red, angry “Danger! Don’t go there!” warning, so I won’t link to it.

My knowledge of finance and stock markets is extremely limited, so I may well make some mistakes here. If so, please do enlighten me. But the first paragraph seems to be saying that Dakang plans to raise 2.314 billion yuan through a private placement of 239 million shares priced at 9.69 yuan each, with the balance after fees have been paid to be used to purchase and remodel the Crafar Farms and Lochinver Station.

But wait! Wasn’t it Shanghai Pengxin purchasing the Crafar Farms and Lochinver Station?!

Well.

Paragraph 2 says that the company (Dakang) will use the money raised to buy 100% of An Yuan Dairy, An Yuan Dairy’s indirectly held title to the Crafar Farms, and the agreement to buy Lochinver Station signed by its subsidiary Pure 100. This will allow Dakang to indirectly take ownership of the Crafar Farms and purchase Lochinver Station.

Paragraph 3 seems to be a clarifier, answering, “So who’s who and who owns who?” I’ll do my best to get this all straight. Paragraph 3 identifies An Yuan as the Hong Kong-listed wholly-owned subsidiary of Dakang’s controlling shareholder Shanghai Pengxin. So, Shanghai Pengxin is selling 100% of its wholly-owned subsidiary An Yuan Dairy to Dakang, a company in which it has a controlling stake. Which begs the question: Who owns the rest of Dakang?

This paragraph also gives some basic information on the Crafar Farms and Lochinver Station. But the next paragraph is where it gets exciting, pointing out that the combined 22 thousand hectares of the Crafar Farms and Lochinver and the 4000 hectares managed on behalf of Synlait Farms would make Dakang the third largest holder and operator of farmland in New Zealand, with annual production of milk solids from these three farms [note: yes, Crafar is 16 farms, but the article treats them as one unit in this sentence] projected to reach 15 million kilograms.

And the goal, the next paragraph explains, is to create a unified production chain, allowing Dakang to supply all the infant formula and liquid milk for its subsidiary Shanghai NuZealand itself.

And yes, judging by this article from April last year, NuZealand is the ‘English name’ chosen for ‘纽仕兰 (Niǔshìlán)’.

And judging by this article from 21 July this year, Dakang bought a 0.64% share in NuZealand from its controlling shareholder Shanghai Pengxin for 8 million yuan.

And now I am running out of time, so I shall leave it at that for now.

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