A receiver will take over management of the company and has six months to sell its assets and pay creditors, Auckland-based Fonterra said today in a statement. Shijiazhuang is the capital of Hebei province in northeast China where Sanlu is based.
At least six infants died and more than 54,000 were hospitalized after 22 companies including Sanlu sold formula made from milk contaminated with melamine, an industrial chemical. Fonterra has 43 percent of a venture with Sanlu and has written off the NZ$200 million ($113 million) investment.
“Bankruptcy may make it easier for Sanlu to sell its assets” as this allows them to be sold in parts, said Zhang Yun from Huatai Securities Co. Sanlu is China’s third-biggest dairy producer and the assets are probably of good value, Zhang said.