As reported in The Weekly Times last week, a number of potential buyers have inspected the plant over the past few weeks.

They include Bega Cheese, Burra Foods and Moon Lake.

Bids are likely to be within $200 million to $300 million, although Saputo will be hoping other bidders emerge to boost the price.

A dairy industry source said Bega Cheese was the frontrunner for the plant.

Bega Cheese chairman Barry Irvin said he was unable to comment due to signing a confidentiality agreement.

Another source told The Weekly Times Moon Lake executives inspected the plant for the second time last week.

But questions remain about Moon Lake’s ability to pay after the company posted a net loss of $1.27 million from its other dairy operation, the Van Diemen’s Land Company, last year.

Moon Lake also recently suffered an exodus of directors, with five of its seven-member board resigning on April 23 over governance and financial concerns with the company’s owner and fellow director, Xianfeng Lu.

Only Mr Lu and managing director Sean Shwe remain on the board.

Mr Shwe said he expected VDL to make a profit this year after suffering poor dairy prices and a drought in the first two years of operation.

But he said this would not affect a bid for any other dairy assets, because funding would probably come from China.

“Because of the restructure (of the Moon Lake parent company) in China, we will have access to equity from over there and it will happen in the next couple of months,” he said.

Burra Foods is 79 per cent owned by Inner Mongolia Fuyuan Farming Co Ltd, part of the Mengniu Dairy group of companies in China.

A source said all bidders with foreign interests needed to get approval for the purchase from both the Australian Competition and Consumer Commission followed by the Foreign Investment Review Board.

Article sourced from www.weeklytimesnow.com.au