Jones unamused by Westland Milk CFO 'breaking wind'

Jones unamused by Westland Milk CFO 'breaking wind' over funding deal

By Pattrick Smellie

Dec. 4 (BusinessDesk) – Regional Economic Development Minister Shane Jones expressed his displeasure at comments by the chief financial officer of Westland Milk Products about the cooperative's $9.9 million Provincial Growth Fund loan, saying it was "something of a surprise to me that the CFO was breaking wind".

Jones was defending the advance from the PGF in Parliament from questions lodged by National's economic development spokesman Paul Goldsmith and Act MP David Seymour. Both questioned the extent of the government's willingness to extend loans that might normally have come from a bank.

Seymour quoted Westland's CFO, Dorian Devers, as saying the terms of the PGF loan were “attractive to us” and that the co-op, which has been facing commercial headwinds and paying less for milk than Fonterra, "could have financed this in other ways but the terms we have been given from the PGF are more favourable".

Jones confirmed only that the PGF loan was for a longer term than Westland could have obtained from its bankers.

Westland Milk farmer-shareholders are due to meet in Hokitika tomorrow morning, where they are anticipating the first progress report from their board on a proposed capital restructuring that would allow Westland to make a competitive payout to farmers in the coming season.

That follows three seasons of after-tax losses and a payout in the last season that was 50 cents per kilogram of milksolids lower than the largest dairy processor, Fonterra.

Any proposed changes would require a 75 percent majority of shareholders.

The $9.9 million PGF loan will go towards funding a new $22 million manufacturing plant targeting higher margin products.

Jones referred first to Devers' remarks as “an unwanted verbal emission from the West Coast” and then as “breaking wind”, but said he agreed with the comment that it was “nice” that the PGF loan terms were better than were available from a bank.

He said there is a robust process for both receiving and approving applications to the PGF, which is resourced to advance loans totalling $3 billion to regional development initiatives over the current parliamentary term.

"Yes, it is different in terms of the last 30 years. Yes, it will challenge some of the purists," said Jones. "But we will continue to do it and look forward to campaigning on it in due course."

The NZ First party polled 4 percent in a OneNews Colmar Brunton poll taken in late November and broadcast last Sunday. At that level the nine-seat party would be swept from Parliament under the MMP voting system, unless it could secure one territorial electorate, which it failed to do in the 2017 general election.

(BusinessDesk)

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