May 1996 decisions

May 1996 decisions

Westpac takes over Trust Bank

The biggest story this month is the take-over of Trust Bank New Zealand Ltd by Westpac Banking Corporation of Australia for $1,255,627,034.44 (sic) through Westpac Holdings-NZ-Ltd. This creates the biggest bank in Aotearoa and puts the entire banking industry, apart from a few regional banks, in overseas hands. The application released by the OIC is in fact a replacement one. Initially Westpac insisted that no land was involved (even though Trust Bank owns substantial amounts of land and $5 billion worth of mortgages) and the OIC approved the purchase on that basis. The insistence is due to a narrow interpretation of the Overseas Investment Act which specifies that only land sales over five hectares need “national interest” approval. Both Westpac and the OIC interpret that to mean “any individual block of land” rather than the total land involved, which would be considerably more than five hectares. Westpac was repeatedly asked to go back and check that no land over five hectares was involved, and finally discovered the subject of this application: a 50% interest in 17 hectares at Tauranga, the Greenwood Park Retirement Village. (Ironically, in Winston Peters’ heartland, and likely housing some of his most ardent supports, the elderly.) When this was found, the OIC withdrew its original consent and within days had the present consent before the Ministers for their signature.

The significance of “finding” this block of land is that if any land is involved, the “national interest” criteria must be considered by the OIC and the Ministers of Environment and Finance. Under the Act, if no land is involved, only patsy criteria are applied: that the investor should have “business acumen”, that no-one controlling more than 25% of the company should be of bad character, and that the investor must be putting money in. However, if land is involved, “national interest” criteria come into play. The relevant ones in this case are:

Whether the overseas investment will or is likely to result in –

(i) The creation of new job opportunities in New Zealand or the retention of existing jobs in New Zealand that would or might otherwise be lost;

(ii) The introduction into New Zealand of new technology or business skills;

(iii) The development of new exports or increased export market access for New Zealand exporters;

(iv) Added market competition, greater efficiency or productivity, or enhanced domestic services in New Zealand;

(v) The introduction into New Zealand of additional investment for development purposes;

In addition there is an escape clause: “such other matters as the Minister [of Finance] and the Minister of Lands, having regard to the circumstances of the particular overseas investment, think fit.” However this must be interpreted in the light of the other criteria and the objects of the Act: “to make better provision for the supervision and control of overseas investment in New Zealand.”

CAFCA wrote to the Commission on 2 May as follows:

“We note with concern that Westpac claims, and the Commission has accepted, that the Trust Bank Group does not own any land for the purposes of the Overseas Investment Regulations. There is clear evidence to the contrary.

Trust Bank New Zealand Ltd’s 1995 Annual Report lists (p.46, Notes to Financial Statements; Note 13) Fixed Assets: Freehold and leasehold Land totalling $24,849,000; with Total Land and Buildings being $82,399,000 (as at 31/3/95).

The Press (“CDL subdivides Chch land”, 24/4/96, p.28) reports that “CDL Investments’ other major subsidiary, LPL Group, is involved in real estate and property services activities. Under the Frank Knight trading name, the group manages Trust Bank’s property resources…”. This implies total land holdings considerably in excess of the five hectare threshold of the Regulations. In addition it is in excess of $10 million. This is the logical conclusion given the considerable number of CBD and branch offices Trust Bank operates throughout the country. Trust Bank Property Holdings Ltd (company number 418943) is owned 499 shares by Trust Bank New Zealand Ltd and one share by Graeme Pentecost, the managing director of Trust Bank New Zealand Ltd.

If land is involved then the following criteria apply and do not appear to be satisfied:

Whether the overseas investment will or is likely to result in –

(i) The creation of new job opportunities in New Zealand or the retention of existing jobs in New Zealand that would or might otherwise be lost;

On the contrary, Westpac’s New Zealand chief executive, Mr Harry Price has confirmed that “it was inevitable there would be some branch closures, redeployment of staff, and redundancies.” Industry sources estimated the loss of up to 2,000 jobs. (Press, “Union worried bank merger will cost jobs”, 20/4/96, p.1, 3.)

(ii) The introduction into New Zealand of new technology or business skills;

Westpac is already a major presence in New Zealand, being larger than Trust Bank (Management Magazine, December 1995). It can be assumed then that any technology or business skills it has available have already been introduced and if they have not been, can be introduced without this takeover. In fact there is evidence that Trust Bank is a leader in some fields of bank technology, and certainly in customer-focused business skills (it ranked very highly in a 1994 Consumer poll on customer satisfaction – Press, 14/6/94, p.31, “Small banks come out on top for customer satisfaction”). This technology and skills could potentially be lost if Trust Bank eventually is absorbed into Westpac. Further, any further technology and business skill development by Westpac and Trust Bank is more likely to take place under competitive pressure than with reduced competition.

(iii) The development of new exports or increased export market access for New Zealand exporters;

On the whole this transaction has little direct relevance to exports. To the extent that it may lead to the export of services or aid other exporters, the same argument applies as (ii). Since Westpac is already a major presence in New Zealand, such developments can take place without the take over and are arguably more likely to take place under competitive pressure than with reduced competition.

(iv) Added market competition, greater efficiency or productivity, or enhanced domestic services in New Zealand;

Clearly this take over reduces market competition. To that extent it is likely to be damaging to domestic services in New Zealand as Westpac is known to discourage low income depositors because they are not sufficiently profitable whereas Trust Bank has a history of being considerably more welcoming to such customers. An obvious way for Westpac to improve Trust Bank’s profitability is to impose Westpac’s policies on Trust Bank, in which case many customers will have worsened service, and in some cases a complete loss of service. We have seen no evidence that greater efficiency or productivity will arise from the takeover, although greater profitability well may arise. The two should not be confused as raised profitability may well arise from reducing services or charging more for them.

(v) The introduction into New Zealand of additional investment for development purposes;

This is a takeover, not “investment for development purposes”. Indeed the “rationalisation” indicated by the new owners (Press, “Union worried bank merger will cost jobs”, 20/4/96, p.1, 3.) indicates dismantling rather than development.

In the light of these criteria not being met by this application, we urge the Commission to reconsider its consent to the take over of Trust Bank by Westpac.”

We could have added that even more land was involved through Trust Bank’s more than $5 billion of mortgages to home owners and farmers.

The consent was based on the national interest criteria. The OIC’s “decision sheet” summarises what it presumably saw as the justification for considering the take-over to be in the national interest. Note that the continual use of the phrases “it is claimed” and “the Commission is advised” indicate that the justification is largely written by Westpac. CAFCA had however forced an admission of job losses:

“The application has been approved as it met the criteria.

The Westpac Group is a major international banking group with substantial banking interests in New Zealand. As such, they clearly have business experience and acumen relevant to the investment. There is no question about their financial commitment to the investment. The Commission is advised that the persons who exercise control over the Westpac Group are of good character and not the kind referred to in Section 7(1) of the Immigration Act 1987.

It is claimed a merger with Westpac New Zealand’s retail banking operations will bring Westpac’s capital resources, higher credit rating, lower cost funding, risk management capabilities and information technology systems and resources to the Merged Bank. A larger merged Bank may also be able to utilise technology which is not available to smaller banks.

The Commission is advised that the merger would result in benefits to the customers of the Merged Bank by combining Trust Bank’s consumer customer service with Westpac New Zealand’s range of wholesale products. It is also claimed services will be able to be delivered on a more competitive basis to customers.

Westpac has announced that it is inevitable that there will be some branch closures, redeployment of staff, and some redundancies. Westpac advises that it is likely that this would have occurred in any event, irrespective of any mergers or acquisitions, because of the excessive number of bank branches, the introduction of new technologies, and changes in customer preferences. The Commission is however advised that the merger of Trust Bank and the Westpac New Zealand operations will have some substantial benefits for Trust Bank staff, including enhanced career prospects through working for a larger international banking organisation.

Westpac advise that the acquisition of Trust Bank will result in approximately $1.273 billion being made available to the present shareholders of Trust Bank, of which approximately $960 million will flow to the eight community trusts which are the major owners of Trust Bank. That money will be available for investment and development in New Zealand.”

Note the subtle finessing of the issues here.

The “larger merged bank” will be only 15% larger than the existing Westpac: unlikely to allow noticeably improved credit rating, funding costs, risk management or information technology. If Trust Bank customers wanted those supposed benefits they could get them without a merger by simply opening an account with Westpac. The fact that they had not done so indicates that the benefits are vastly overstated.

The word “competitive” is sneaked in to apparently satisfy the criteria. In the context it means just the opposite of the “added market competition” criterion. Westpac will be able to be more “competitive” in offering services to customers because it will have eliminated an important competitor and so can take more of the market. It will win because there is less competition. As we pointed out in our original letter, there is no evidence for a “win” for customers. Any services offered by the merged bank were available before the merger and probably on a more competitive basis from the customer’s point of view.

The claim for staff benefits can only be described as bizarre in the context. That a few senior staff will have better career prospects hardly outweigh the job losses resulting from the merger. In fact it may shed some light on the motivation of Trust Bank executives in initiating the merger. Perhaps, as is claimed, Aotearoa is indeed “overbanked” (so much for the benefits of competition). But there is no evidence, and it is pure speculation, that Trust Bank staff would have been the ones who lost out. It might have been Westpac staff or staff of some other bank entirely.

And similarly, while the $1.273 billion Westpac is paying, “will be available for investment and development in New Zealand”, it is speculation whether or not it will be used for development, which is the requirement of the criterion. Some of it will be paid in Westpac shares, which at best will have no effect on development in Aotearoa. The Community Trusts will put the money safely aside (as they did with their Trust Bank shares) and use only the income from those investments. For all we know, other investors will spend the money on overseas trips or on the TAB.

The OIC wrote to the Ministers of Finance and Lands on 16 May recommending that they approve the takeover within 24 hours, which they faithfully did. The OIC’s letter used the above justification almost word for word. They did add however that “as Trust Bank overlooked the fact it owned land settlement is now a matter of urgency” (perhaps they heard legal action on their heels); and “the Commission is of the view that the land at Tauranga in which Trust Bank holds an interest is of little significance when considering the overall proposal by Westpac.” As “other matters” they noted that the community trusts “will derive more income for distribution to their communities”, and that the Commerce Commission and the Reserve Bank had both cleared the takeover. They took no action to alert the Ministers to consider whether the huge portfolio of mortgages (i.e. securities over land) or the substantial amount of land which Trust Bank holds made the issue of considerably more significance, legal or otherwise.

They attached a check sheet of the criteria. “Added market competition” was ticked, as was “introduction of additional investment” but not those criteria concerned with job opportunities, new technology or new export markets. No explanation is given as to how they justified the “ticks”, or balanced them against the failed criteria.

The sale has shown the Commission and the Ministers of Finance and Lands to be fronting an elaborate charade that brings their own legislation and the Parliamentary process into contempt.

Skellerup of the U.S.A., sells CablePrice to Hitachi of Japan

In a decision originally completely suppressed and released only in November 1996, concerning a takeover which did not appear to have been generally reported, Skellerup Group Ltd, owned by Maine Investments of the U.S.A., is selling its subsidiary, CablePrice Ltd, to Hitachi Construction Machinery Co. Ltd, a member of the Hitachi Group of Japan, for “approximately $12 million“. Skellerup formerly belonged 30% to Brierley Investments Ltd, as we reported in February 1996:

“Skellerup Group Ltd, formerly a public company 30% owned by Brierley Investments but subject to a management buy-out last December, is now owned by Maine Investments Ltd which is 84% owned by GS Affiliated Funds associated with GS Capital Partners II of the U.S.A. and 16% by members of the senior management of Skellerup Group Ltd, all of whom are Aotearoa residents. The price paid was “approximately” $407,129,262. According to press reports, ‘GS’ stands for Goldman Sachs, the U.S. finance house which financed Skellerup chief executive Murray Bolton in the buy-out.

“Skellerup is a diversified conglomerate of manufacturing companies assembled by Brierleys from its other acquisitions. According to Brierley annual reports, it includes the original Skellerup Industries based on the old Christchurch family firm’s rubber products; Masport, the mower company now making wood fires, barbeques and operating Aotearoa’s largest iron foundry; Paykel engineering supplies, Projex equipment hire, Skellerup Flooring, Cable Price Corporation, and Viking Footwear; Lane’s Industries, including market leader Palmers Gardenworld, and Watkins seeds; DML Resources, formerly Downer Mining, the largest contract mining and earthmoving organisation in Aotearoa; Dominion Salt, the sole producer and refiner of industrial, food, rural and pharmaceutical salt products in Aotearoa, jointly owned with Cerebos Greggs; the Levene Group retailing home decorating products; and Dunlop Flow Technology. In 1995 the Group was the 25th largest company in Aotearoa (ranked by turnover in Management, December 1995).”

Cable Price is a major supplier of engineering and heavy equipment, including a Hitachi dealership.

Rockgas takes over LPG supply business of BP Oil New Zealand

Rockgas Ltd, which is ultimately 50% owned by the Boral “Group” of Australia and 50% by Caltex Petroleum Corporation of the U.S.A. has approval to “acquire property comprising part of the commercial LPG supply business and assets of BP Oil New Zealand Ltd“. The price paid has been suppressed. According to the Press (1/6/96, “Rockgas purchase”, p.28) Rockgas was one of several bidders for BP’s LPG assets.

Electronic Mail International increases shareholding in Triumph Industries

Electronic Mail International Ltd which owns 50.97% of Triumph Industries Ltd has approval to acquire a further 8.17% (approximately) for $3,139,010. Triumph had announced a 1 for 5 rights issue which Electronic Mail was underwriting. Triumph owns the head Apple Computer distributor in Aotearoa, CED Distributors, and the Apple resellers Epsom MGC Systems (which trades as the Apple Education Centre) and Computer Distributors Ltd both of which it amalgamated into the CED Group in August. It also owns computer product distributors Brimaur Technologies, Renaissance Software and Origo. (Press, 20/8/96, “CED, resellers combine”, p.31; 4/7/96, “Triumph purchase”, p.31; 7/8/96, “Triumph Ind lifts profit, picks better second half”, p.27.) Electronic Mail is “ultimately” owned 51% by Acma Ltd of Singapore, and 39% by M. R. Thompson and 10% by T.A. Grey, both of Aotearoa.

Probo Pacific (Sweden) takes 50% of Raffles (Singapore) for $2

Probo Pacific Ltd, of Singapore but wholly owned by AB Catena of Sweden, is exercising an option to take a 50% shareholding in both Raffles South Island Ltd and Raffles New Zealand Ltd for $2 each. The two Raffles companies were both wholly owned by Royal Worldwide Pte Ltd of Singapore which is owned by the brothers, R. and A. Kumar. Raffles South Island bought a 60% interest in the Holiday Inn Hotel in Queenstown in 1994 and 100% of Novotel Hotel in Auckland in 1993. On both occasions, “the purchase was partially financed by Probo Pacific, who at that time entered into an option agreement to acquire 50% of the shares in Raffles.” In 1994, the other 40% of the Queenstown hotel was owned by BLE Capital Ltd, 44.44% owned by Westpac, 44.44% by AMP, and 11.12% by 3I International Holdings Ltd of the U.K.

Sovereign Financial Services buys S.H. Lock (NZ) Ltd of the U.K.

In a decision originally completely suppressed and released only on appeal in November 1996, Sovereign Financial Services Ltd, a subsidiary of Sovereign Assurance Holdings Ltd which is “approximately 47.2% owned by offshore investors” has approval to buy up to 100% of S.H. Lock (NZ) Ltd which is a subsidiary of S.H. Lock Consolidated Ltd of the U.K., for $1,700,000. In March 1996 we reported that Sovereign Assurance Company Ltd, which was then owned “approximately 37.5% by various overseas individuals”, had approval to buy FAI Holdings New Zealand Ltd, a subsidiary of FAI Insurances Ltd of Australia, including Metropolitan Life.

Taiwanese buy 1 Queen St, Virgin Islands company buys 125 Queen St

Harbour Edge Auckland Ltd, which is majority owned by Taiwan residents, has approval to buy 1 Queen Street, Auckland from Australian Mutual Provident Society subsidiary, Number 1 Queen Street Ltd for a suppressed amount.

Milverton International Investments Ltd which is “owned” in the tax haven, the British Virgin Islands, has approval to buy 0.2020 hectares at 125 Queen St Auckland from Compass Enterprises Ltd for an amount originally suppressed but revealed in November 1996 to be $68,451,000. Other information concerning Milverton and Compass remains withheld.

UK drug firm buys farm to breed transgenic ewes with human protein in milk

PPL Therapeutics (New Zealand) Ltd which is a subsidiary of PPL Therapeutics Plc of the U.K. has approval to acquire a 58 hectare farm at Whakamaru in the Waikato for $1,050,000. “PPL propose to use the farm to breed a production flock of transgenic ewes producing a human protein in their milk. Such an activity is subject to government approval to the importing of semen from transgenic rams into New Zealand. The flock will be farmed to provide milk which will be processed for the valuable therapeutic protein. The Commission is advised that if such approval is not forthcoming, the farm will be used to breed high health status animals for export to the United Kingdom.”.

PPL, which is based in Edinburgh, specialises in producing “therapeutic proteins (or food proteins etc) in the milk of transgenic animals (mostly sheep)”, and exports to Western Europe, Australasia, the U.S. and Japan (ref: http://www.webscot.com/sba/ppl.htm).

On 29/9/95 the Minister for the Environment Simon Upton announced that an application to field test genetically modified sheep had been declined. It appears that PPL is not taking “no” for an answer.

Japanese-owned Kinloch Station expands for tourist development

The owner of Kinloch Station, on Lake Taupo, is buying further land. The station is owned by Kinloch Holdings Ltd which in turn is owned by Saburo Okakura and his family, resident in Japan. They are adding to 255 hectares of Kinloch Station a further 39 hectares from W.A.D. and R.J. Bremner for $1,525,000, and 100 hectares from Whangamata Station Partnership and Kinloch Sevices Ltd for $4,620,000, a total expenditure of $6,145,000. Proposed tourist developments on the 394 hectares include a conference centre to cater for 200 people with appropriate accommodation, two 18-hole golf courses (one public, one private) and “in the longer term and abutting Lake Taupo” an international hotel. In February 1991 we reported that “the 885 hectare Kinloch Station has been sold to a company owned by a Japanese resident, Barwon Ltd, for $2,560,000 to be ‘extensively redeveloped’ and run by local contractors and a New Zealand manager”.

Singaporean owners of Gulf Harbour project at Whangaparaoa reorganise

Three Singapore residents are reorganising their interests in the Gulf Harbour Project and Marina at Whangaparaoa. The development is owned by Gulf Harbour Holdings Ltd and owns 333 hectares of land at Whangaparaoa. Goh Cheng Liang will acquire 55% of Gulf Harbour Holdings, and Sim Lai Hee and Tay Kwang Thiam will acquire 20% each. Who owns the remaining 5% is not stated (though on inquiry, the OIC told CAFCA that it was acquired by Mr Tan, a permanent resident of Aotearoa). Mr Tay previously only had an indirect interest in the project. The price was originally suppressed but was released in August 1998: $64,658,345. In June 1992 we reported:

An unusual case for the OIC involves a Singaporean, Goh Cheng Liang, who is acquiring “all the assets, including freehold land, leasehold and seabed licence interests in a marina and associated service land, all plant and equipment of Gulf Harbour Ltd, Gulf Harbour Marina Ltd, Gulf Harbour Investments Ltd, and Gulf Harbour Estates Ltd.” Gulf Harbour is on the Whangaparaoa Peninsula, Auckland. The Gulf companies have been in receivership since December 1989. “Mr Goh has agreed to recognise the interests of the existing marina berth licence holders.” What makes it unusual is that the OIC has made approval subject to the following conditions: “The consent is conditional on Mr Goh furnishing the Commission with an appropriate development plan and schedule within two years and that the proposed golf course be open to international and domestic golfers alike.” The golf course conditions have been pretty well standard since the controversy over the Wairakei Golf Course in 1990. But the development plan requirement is unique.

The area is undergoing major development, as reflected in this description from New Zealand Fishing News, October 1995:

“The Whangaparaoa Peninsula lies about 30 minutes north of Auckland city, jutting out east into some of the besting fishing waters in New Zealand. The peninsula, at the heart of the Hibiscus Coast, used to be home to holidaymakers, but over the years most of the baches have slowly disappeared, replaced with permanent dwellings. With better roads and amenities people have chosen to commute between Auckland and Whangaparaoa, and with the amount of development going on in the area, especially down by Gulf Harbour Marina, a lot more plan to in the future. Gulf Harbour is being developed into a real paradise, including a canal-frontage housing development. A golf course is also planned, which is not a bad idea for those people who don’t know how to fish!

The Gulf Harbour Marina complex has all the facilities boaties require. Petrol and diesel are available 24 hours a day, seven days a week via pumps which work on a card system (either Shell cards or Gulf Harbour cards available at the office). Other services offered are a travel lift, boat washing and a large hardstand area for extended onshore maintenance. Boat painters, builders, engineers, electricians, refrigeration engineers and riggers are all on site. Several charter companies also have boats based at the marina, both for bareboat charter and skippered. There are shops nearby selling all supplies needed for a day or extended fishing trip… Behind the plaza is the main shopping area, which is currently being extended…”

Land for forestry

• Carter Holt Harvey Ltd, 51% owned by International Papers of the U.S.A. is buying
• two blocks of land for forestry planting at Ongarue, King Country, Auckland. One, of “approximately 401 hectares“, is for $1,350,000, the other of “approximately 855 hectares” is for $1,841,250 from Foxley Station Ltd. With the first, it proposes “to sub-divide out a dwelling and approximately ten hectares and to sell or exchange that property”. With the second, it proposes “to sub-divide out the deer farm and homestead with approximately 100 hectares and offer the same for sale”. In both cases, it is also intended to sub-divide out further areas of land and sell or exchange them with a neighbouring farmer to “rationalise” the boundary between the properties.
• 15 hectares of land at Clifton Bay, Marlborough from another U.S. forestry transnational, Rayonier New Zealand Ltd. The land is to be developed as a seed orchard for the company’s afforestation program and is changing hands for $149,000.
• Deborah Miller of Brookfields, Auckland, is at it again. In a new scheme, she is selling blocks of land which are part of the Mahuri Forest, Mangamahu, near Wanganui and whose forestry development will be managed by the company selling the land, New Zealand Forestry Group. There are nine blocks of land being sold, to seventeen Taiwan residents. The sizes of the blocks are 42, 22, 21, 53, 39, 23, 19, 17, and 37 hectares, for $184,800, $85,800, $206,700, $86,100, $159,900, $101,200, $77,900, $69,700, and $151, 700, respectively.
• Juken Nissho Ltd, which is owned by two Japanese companies, Juken Sangyo Co. Ltd (85%) and Nissho Iwai Corporation, is acquiring ten hectares of land in Norfolk Road, Masterton for $180,000. It is buying the land from Norfolk Beef Ltd “as a land-bank for future development by way of extension of the existing Masterton mill operation which is currently operating at near full capacity”. Juken Nissho will make the land available to the Masterton Business Enterprise Council “for utilising as a beef processing plant for a two year period”.
• Southland Plantation Forest Company of New Zealand Ltd, ultimately owned by New Oji Paper Company Ltd and Itochu Ltd of Japan, has approval to buy 560 hectares of land at Waiarikiki, Southland for $700,000 for forestry. As usual with its purchases, all forestry activities will be conducted under contract by South Wood Export Ltd, which is owned 66.6% by MK Hunt Foundation Ltd of Aotearoa and 33.3% by C Itoh and Company of Japan.
• Rayonier New Zealand Ltd, which is owned by Rayonier Inc of the U.S.A., is buying 578 hectares of afforested land at Adams Flat, Milton, for an initially suppressed amount which was revealed on appeal in November 1996 to be $1,200,000. It is being purchased from Temby Holdings Ltd, from which Fulton Hogan bought 449 hectares of afforested Adams Flat land in March 1995.

Other rural land

• Two residents of the U.S.A. have approval to buy 0.4122 hectares at Tokerau Beach, Northland for $85,000 for “lifestyle purposes”. “The land is being acquired to enable the applicants to erect a residential dwelling on the land for their own use during their frequent visits to New Zealand.” Despite their being absentee owners, because they are paying to build the house and develop the bare section they are deemed to be “introducing off-shore capital” and “creating job opportunities” and because they are buying, they are “providing” the sellers “an opportunity for further investment activities”. The criteria for accepting the investment are therefore deemed satisfied. On that basis, any sale of land to an overseas person will be accepted as long as they are spending some money on its improvement.
• McDonald Lime Ltd, which is 52% owned by Milburn New Zealand Ltd which in turn is “approximately 72%” owned by Holderbank Financiers Glaris Ltd of Switzerland is doing a land swap to continue its lime mining operation. It is acquiring 14 hectares of land at Pakeho near Te Kuiti, Auckland, in exchange for 14.5 hectares of adjoining land belonging to the Grainger Family Trust of Te Kuiti. The land McDonalds is acquiring is said to be of poor quality and the land it is giving is “better quality farm land”. McDonald’s will return the land to pasture land when it has completed its mining activities on it, and the Trust has first right of purchase.
• Milburn also has an interest at Amberley, Canterbury. Amberley Sand (1966) Ltd is 50% owned by Allied Milburn Ltd, which in turn is 50% owned by Milburn New Zealand Ltd. It is leasing 12 hectares of land at Amberley for up to 15 years three months for mining sand, gravel, and shingle. It had been previously mined by the other 50% shareholder in Amberley Sand, Mr R. Harper of Aotearoa. Payment is “$1.00 per cubic metre of sand taken at the gate or 5% of the F.O.B. gate price whichever is the higher”.