October 1996 decisions

October 1996 decisions

INL gets approval to buy all of Sky Network

In a remarkable decision originally almost completely suppressed and released only in April 1997 after appeal to the OIC, Independent Newspapers Ltd (INL) which is owned 49.53% by News Ltd of Australia, or News Ltd itself (or an associated company) are given approval to buy 100% of Sky Network Television Ltd for an amount that was still suppressed in April 1997 and not released until February 1998: $223,226,841 for 15.84%. What is remarkable is that INL is recorded by the OIC as owning 32.16% of Sky. The approval is to take over the remaining 67.84%. Though it has been publicly reported that INL was close to agreement to buy up to 80% of Sky, this is the first suggestion that it had actually purchased some. The figure 32.16% implies that shareholders Tappenden Construction (headed by Alan Gibbs and Trevor Farmer 7.51%), Todd Communications (subsidiary of the Todd Corporation, 8.8%), Craig Heatley and Terry Jarvis (15.85% between them) had sold out. In fact it was reported in March 1997 that INL had given up and the deal was off (Press, 1/3/97, “INL scraps bid to own Sky; investors left pondering”, p.25). See our commentary on the OIC’s June 1996 decisions.

Rand Merchant Bank of South Africa wants to deal in electricity

In an approval which indicates, firstly, the likelihood of speculation in the newly established New Zealand Electricity Market, and secondly, the flimsiness of the already vestigial requirements of foreign investors, RMB Australia Ltd, a subsidiary of Rand Merchant Bank Ltd of South Africa, has approval to “acquire property (electricity) in New Zealand and commence business”. It expects that the amount payable will exceed $10,000,000. One of the criteria for non-land investments is that the applicant should demonstrate “financial commitment to the proposal”. The OIC has accepted in fulfilment of this criterion an

“undertaking to lodge collateral in the form of bank guarantees or letters of credit with the Clearing Manager of the New Zealand Electricity Market to comply with the prudential requirements of said Market. The existence of a Deed of Guarantee providing for the obligations of the applicant to be guaranteed by Rand Merchant Bank Ltd is further evidence of the applicant’s financial commitment to the project.”

In this, Rand Merchant Bank is getting off considerably more lightly than the actual energy supply companies who provide services to consumers. According to the New Zealand Herald (17/6/96, “Power companies asked for deposit”, by James Gardiner),

“Electricity supply companies face paying cash bonds totalling more than $100 million before they can take part in the new wholesale market. The companies also risk being put in receivership or having their electricity cut off if they default on their bills. Some of the former power boards have taken exception to the proposed market rules and are trying to get receivership provisions rewritten. But the Electricity Corporation and Contact Energy are believed to be insisting on the prudential and default provisions. …

“Companies buying through the market will have to put up cash security equivalent to the value of their peak demand plus a margin. This will range from $300,000 for the smallest buyers to $30 million for the largest. Those amounts will have to be topped up if power prices rise dramatically at any time.

“If the power companies do not want to pay cash, they will need a bank-grade credit rating (A minus or better), which most are unlikely to get, or a letter of credit from a bank. However they do it, the companies will face higher costs, which, if not offset by greater efficiencies in the market, will be passed on to the consumers.”

These rules would obviously put a bank like Rank at a significant advantage to the supply companies in bidding for wholesale electricity. Some may in fact be forced to use the bank’s services rather than trade directly, adding to the costs of electricity.

RMB Australia, listed as Australian Gilt Securities (RMB Australia was formerly AGS, which was taken over in 1988 by RMB), is the only member of the “Trader Class” amongst the “Market Participants” in the New Zealand Electricity Market (NZEM) as at 1 October 1996. “Market Participants” are defined as “companies who have applied to become Members of NZEM”. The others comprise the “Generator, Purchaser and Trader Class” (Contact Energy, ECNZ, Mercury Energy, Otago Power Limited, and Pacific Energy), the “Purchaser and Trader Class” (Central Electric, Counties Power, Electro Power, Energy Brokers, MainPower New Zealand, NorthPower, PowerBuy Group, Southpower Energy Purchases, Tasman Energy, and Trans Alta), the “Generator and Trader Class” (Stratford Power), and the “Purchaser Class” (BHP New Zealand Steel Ltd, King Country Energy, and TrustPower) (ref: Electricity Marketing Company Ltd’s Web site http://www.emco.co.nz/nzem/index.htm).

Clearly the merchant bank sees this trading and hedging on the electricity market as a source of profit. RMB Australia appears to specialise in derivatives and similar financial risk instruments and includes amongst its “services”

“RMBA is pioneering the application of risk management techniques in the deregulated electricity industry with a particular focus on energy risk management, the development of structured product and hedging. In New Zealand, RMBA provides full electricity trading outsourcing services in partnership with Energy Group Limited.” (From http://www.rmb.co.za/ags.html on Rand Merchant Bank Holdings Ltd’s Web pages.)

The parent company, Rank Merchant Bank, in South Africa, performs similar functions in regard to mining products: “Trading and hedging, by using innovative techniques, of all kinds of commodities – from precious metals to units of electricity – in all appropriate international markets.” (http://www.rmb.co.za/resources/areas.html)

Rand Merchant Bank is a subsidiary of RMB Holdings, through its life insurance company, Momentum Life Assurers Ltd. The main activity of the holding company is life assurance, although it also has subsidiaries in asset management, health insurance and short term insurance. Its subsidiaries include Rand Merchant Bank, RMB Asset Management, Momentum Health, RMB Properties and RMB Securities Trading. It jointly holds short-term insurer Aegis with NBS Holdings (MBendi Information Services, http://mbendi.co.za/ca94.htm).

The bank has taken a close and public interest in the privatisations being promised by the South African government, and

“Towards the end of 1995 RMB secured a contract for the bank to advise on the sale of Mossgas [the apartheid-era gas-to-oil conversion plant, considered to be a white (!) elephant]. Recent developments for the bank include the financing of the first stage of a $925 million hydroelectric dam at Sonda Gorge in the Congo, with $15 million being contributed by the bank. The balance will come from the Congolese governments and European institutions.” (MBendi Information Services, http://mbendi.co.za/corm.htm.)

Publicly, it has taken much care to appear “socially responsible”. As its “Social Responsibility” Web page boasts “We don’t just give – we enable: Rand Merchant Bank’s approach to social upliftment goes beyond mere corporate donations and involves the application of its banking expertise to pressing development problems” and describes examples.

However things aren’t quite that simple. The Financial Mail of South Africa reports (“Umgeni water: Exposure or cover-up?”, 19/1/96, http://www.atd.co.za/fm/issues/190196/LA.2.html):

“The outcome of the fund-raising of the Umgeni Water Board, a public-sector storage and reticulation utility which has been the subject of a ministerial inquiry, is that the shareholders of Rand Merchant Bank have been enriched to an unquantifiable extent at the expense of consumers and taxpayers…

“The investigation by auditor Fisher Hoffman Sithole poses questions in a number of vital areas.

“The first is how Rand Merchant Bank is able to initiate a borrowing programme through a public-sector entity which results in trade totalling R86bn on which losses of R162m are sustained and is then able to avoid disclosing its profits to the investigators.

“You can bet your bottom dollar that bank MD Paul Harris knows precisely how much the bank made. This is because of the bank’s ‘marking to market’ procedures – an arcane phrase which means the bank’s positions are marked against prevailing prices at the daily close of business.

“Moreover, the bank is audited twice a year by two accounting firms. The results – to the last cent – must be open for inspection.

“RMB employs clever executives, some of whom are given incentives based on the bank’s profits. They, too, are going to know to the last cent how well the bank has done.

“Fisher Hoffman says that, because of complex cross-hedging with other stocks carrying different default risk profiles, it cannot quantify the extent of RMB’s profits on its Umgeni transactions. The only reason it cannot do so is that the bank won’t tell.

“Over two vital years of trading – the years in which Umgeni sustained the bulk of its losses – RMB was Umgeni’s sole market maker. Of course, it is possible that Umgeni’s loss of R162m – a large part of it avoidable – did not accrue to RMB as a profit but, in the absence of a convincing alternative explanation, reaching a different conclusion stretches credulity.”

So not only is it questionable whether financial commitment is being made in this investment, but questions over the character of the controlling shareholders have been raised.

CS First Boston takes over Feltex Carpets

Fairbanks Investments Ltd which is owned 96% by a nominee for CS First Boston (Europe), AG, and 4% by Messrs Davis and Steedman, both residents of Aotearoa, has approval to acquire the business assets of Feltex Carpets Ltd. CS First Boston (Europe) is approximately 65% owned by CS Holding of Switzerland (i.e. the major bank, Crédit Suisse). The purchase includes the following land:

• six hectares of leasehold land in Duncan St, Foxton, Manawatu;
• seven hectares of leasehold land in Miller St, Dannevirke, Hawkes Bay;
• five hectares of leasehold land “more or less situated in or adjoining the bed of the Rangitikei River“, Sandon (presumably Sanson), Manawatu; and
• 35 hectares of freehold land in Halcombe Road, Kakariki, Manawatu.

The whole decision was originally completely suppressed. It was released in August 1997, but with the price still suppressed.

Feltex was owned until 1996 by BTR Nylex, of the U.K., which bought it as part of Feltrax International from the corpse of Equiticorp in 1989. It apparently decided to sell Feltex Carpets in March 1996. Feltex is the third largest manufacturer in Aotearoa and 25th largest exporter (exporting two-thirds of its output), employing 1,200 people. It also has a carpet factory in Christchurch. The Mr Davis mentioned above as a shareholder is Chris Davis, general manager of Feltex Carpets. (Press, 22/6/96, “Feltex Carpets for sale”, p.27; 11/12/96, “Management may buy Feltex”, p.28; 12/12/96, “Feltex confirms sale”, p.32).

In January 1997, the Commerce Commission gave Alliance Textiles clearance to buy Feltex Yarns. This included yarn plants at Wainuiomata and Kakariki, which it closed down with the loss of 100 jobs. The purchase made Alliance the biggest yarn producer in Aotearoa (Press, 22/1/97, “Feltex deal approved”, p.29).

Heinz-Wattie of U.S.A. buys Shortland Cannery

In a decision originally almost fully suppressed and released only after appeal to the OIC, in April 1997, Heinz-Wattie Ltd, which is a subsidiary of H J Heinz Company of Pittsburg, Pennsylvania, of the U.S.A., has approval to acquire meat processor Shortland Cannery Ltd (formerly named Waytemore Investments Ltd) for a still suppressed amount. “It is stated that Heinz-Wattie view the combining of Shortland’s canning operation with Heinz-Wattie’s canning operation as bringing greater efficiencies which in turn will benefit its New Zealand customers.” According to NZPA (Press, “Heinz-Wattie buys cannery”, 9/11/96, p.28) Shortland belonged to the family interests of former Carter Holt Harvey owner, Sir Richard Carter. Heinz-Wattie said it “marked the entry of a major branded food company into the country’s meat industry”. However just two months later Heinz-Wattie announced it was moving the Shortland meat processing plant from Auckland to Australia. It said that “after three months of looking at transfer options, Southern Country Foods in Wagga Wagga, New South Wales, was confirmed as the lowest cost business”. Most of Shortland’s 47 staff would lose their jobs. It would however invest $2 million at its Tomoana site in Hastings (Press, “Heinz-Wattie move meat plant to Aust”, 11/1/97, p.22).

At the same time, Heinz-Wattie subsidiary Tip Top Ice Cream was rejected by the Commerce Commission in a takeover bid for New American Ice Cream owned by the Diary Group, saying it would give Tip Top a dominant position in the take-home ice cream market, although not in frozen novelties, scoop ice cream and frozen desserts. Following this, Heinz-Wattie put Tip Top and another subsidiary, Tegel Foods, on the market. Tip Top holds about 80% of the national ice cream market and Tegel about 70% of chicken sales. It also announced that J Wattie Foods, Wattie Frozen Foods and BestFriend Petfoods would merge into Heinz-Wattie Ltd. (New Zealand Herald, “Tip Top, Tegel go up for sale”, 14/11/96; Press, “Tip Top trims bid for New American”, 25/10/96, p.19.)

Coca-Cola Amatil to buy PET bottle manufacturing from Carter Holt

Coca-Cola Amatil (NZ) Ltd, in a decision originally almost wholly suppressed and released only in April 1997 on appeal to the OIC, has approval to “acquire property being specific assets in relation to the manufacture of PET bottles and PET preforms currently undertaken by Carter Holt Harvey Ltd“. The price is still suppressed. Coca-Cola Amatil (NZ) Ltd is a “member of the Coca-Cola Amatil Ltd group of companies” of Australia. This sale does not appear to have previously been made public. The property is in Auckland and Christchurch.

Shriro of Hong Kong takes fuller control of Transmark Corporation

Shriro Pacific Ltd of Hong Kong now has a 92.55% interest in electronics distributor Transmark Corporation. It is doing this through Gandava Investments Ltd which is acquiring 100% of Transmark. Gandava is 92.55% owned by Shriro and 7.45% by Ocin Holdings Ltd of Aotearoa. The price was $25,119,829, based on a price of $1.60 per share. The OIC states: “Shriro Pacific was previously granted consent to acquire up to 100% of Transmark.” This approval was in June 1993, when Shriro was registered in the Cayman Islands. Its shareholding in Transmark has risen steadily since it first gained approval to take a 50% shareholding in August 1991. “Shriro have now advised that the acquisition is to be undertaken by Gandava and this will result in New Zealand parties retaining an interest in Transmark.” Gandava secured 92.3% of Transmark in November and declared the offer unconditional, having increased its price to $1.95 a share (equivalent to a total of $30,614,792) in October.

The increase in price and extension of its acceptance deadline came after cries of “unfair” by minority shareholders and a challenge by an independent director. One of the company’s top 20 shareholders, James Cornell, called it “insulting”, and largest minority shareholder, Toronto Unit Trusts, also indicated its unhappiness. A valuation by Ernst and Young indicated a fair price of $2.00 to $2.15.

Gandava owned 74.07% of Transmark before the buyout, with 7.55% of Gandava being owned by Transmark managing director, Nico Wamsteker (Press, 16/9/96, “Transmark bid ‘insulting’”, p.38; 27/9/96, “Report values Transmark higher”, p.16; 26/10/96, “Transmark bid raised”, p.28; 22/11/96, “Transmark unconditional”, p.29). Shriro is owned by Mark Shriro who lives in Monaco. Transmark’s chairman, David Wilson, lives in Hong Kong. In March 1996, Transmark sold its 1995 acquisition, U-Bix Business Machines Ltd, to Blue Star.

Harvey Norman Group prepares to set up shop

Harvey Norman Holdings Ltd, an Australian public listed company, and any wholly subsidiary of the Harvey Norman “Group”, are given approval to commence business in Aotearoa. The amount they propose spending is “in excess of $10,000,000”.

Press reports indicate aggressive plans by the Australian retailer, which stocks “furniture to whiteware”, including computers. It hopes to open 16 to 20 stores in Aotearoa during the next five years, two stores opening in Auckland in the second quarter of 1997, and a third later that year. Ten per cent of the floor space would be devoted to computers. The company has 56 stores in Australia. (Press, 18/9/96, “Harvey Norman plans 16 to 20 stores in NZ chain”, p.32.)

One U.S. company to another: Borden packaging sells to AEP

Borden Inc of the U.S.A. is selling its subsidiary, Borden (NZ) Ltd to AEP Industries Inc of the U.S.A. for US$21,576,000 (about $30,823,000). The operation manufactures flexible packaging and AEP “which has business experience relevant to the Borden’s business activities, intends to develop and expand that business”.

According to press reports, the name will be changed to AEP Industries (NZ), and the operation had previously been part of AHI, UEB, Whitcoulls and Printpac (Press, 14/11/96, “Packaging name change”, p.36). Indeed, the OIC last heard from Borden in March 1990, when we reported that

Borden Inc (U.S.) is taking over Printpac-UEB’s flexible packaging operation. The application says this is “in recognition of the need for the flexible packaging business to become part of a global international packaging operation. It is felt that only through such an international and global operation would the business be capable of keeping abreast with the rapid technological development in the industry. Borden sees the acquisition of the flexible packaging group from Printpac-UEB as an opportunity to expand its packaging operations throughout Australasia.”

In fact the situation is somewhat less benign than either news or OIC reports suggest. AEP Industries Inc has taken over Borden Inc’s entire “Global Packaging” business. On 11/10/96 AEP announced that:

“it has completed the acquisition of Borden, Inc.’s Global Packaging business. The acquisition more than triples AEP’s annual sales and establishes AEP as a world-class industry competitor with leading market share positions in several key product segments in the U.S. and Europe, a broader geographic presence and a wider range of product offerings.”

The takeover also included a new AEP board made up of four directors from Borden, five from AEP board, and one jointly chosen (“AEP Industries Inc. completes acquisition of Borden global packaging”, press release by AEP, 11/10/96, http://www.aepind.com/newsletters/oct-11-1996.html).

The Italian magazine, Italia Imballaggio (“The Voice of Italian Packaging”!), went as far as saying that the takeover “created the largest supplier of plastic packaging pallet stretch films in the world and one of the largest plastic packaging manufacturers for the food industry at European level” (http://www.webcity.it/italiaimballaggio/news_e.html).

The takeover was followed rapidly by job losses:

“AEP Industries Inc. announced today that it has ceased manufacturing operations at a plant in North Andover, Mass., that had been part of the Global Packaging division of Borden, Inc. AEP acquired Borden’s Global Packaging business on October 11, 1996. The North Andover plant manufactured pallet wrap and polyvinyl chloride (PVC) film products.

“Approximately 320 employee positions will be phased out over the next four months as a result of the North Andover plant closing. … Additionally, AEP plans to eliminate approximately 40 administrative and sales positions, most of which are based in North Andover. The Company stated that it does not anticipate any further significant plant consolidations in North America.” (“AEP Industries Inc. closing facility acquired from Borden Global Packaging”, press release by AEP, 24/10/96, http://www.aepind.com/newsletters/oct-24-1996.html.)

AEP paid a total of approximately US$360 million (about NZ$514 million) for the Borden packaging business, US$280 million ($400 million) in cash, and “at least” US$80 million ($114 million) worth of newly issued AEP shares, giving Borden approximately 34% of AEP.

On 13/9/96, AEP had announced falling sales and net income for the previous year, due largely to borrowing for the Borden takeover (“AEP Industries Inc. announces record third quarter earnings per share”, press release by AEP, 13/9/96, http://www.aepind.com/newsletters/sep-13-1996.html).

The two companies were described in the takeover announcement as follows:

“Headquartered in South Hackensack, New Jersey, and employing about 1,100 people, AEP Industries manufactures, markets and distributes nationally an extensive range of polyethylene film products for stretch pallet wrap, industrial packaging, agricultural and can/box liner applications. It achieved record sales and net income of US$242.9 million and US$13.5 million, respectively, in its fiscal year ended October 31, 1995, double its annual sales just five years earlier in 1990 and 3 ½ times that year’s net income.

“AEP markets its specialty and standard polyethylene film products to the packaging, beverage, food, pharmaceuticals, agricultural and textile industries. It operates five highly efficient manufacturing plants in the United States. A now complete capacity expansion and manufacturing efficiency program included new facilities started up in Wright Township, PA, in early 1996 and Alsip, IL, in mid 1995. Other facilities are located at Waxahachie, TX, Matthews, NC, and Chino, CA.

“Borden Global Packaging had calendar 1995 sales of approximately US$625 million, primarily flexible film for stretch wrap and other packaging uses, and rigid plastic packaging. Nearly US$250 million of the total is in North America, slightly over US$300 million in Europe and US$75 million in the Asia/Pacific region.

“The Borden packaging business employs about 3,500 people and operates 27 plants in 12 countries. Its film products are made from polyvinyl chloride, polypropylene and polyethylene resins and marketed under several brand names including Resinite, Sealwrap, Loadmaster, Proponite and OPPtimum. Not included in the sale are Borden packaging businesses in South America, which continue to be integrated within the Borden Chemical, Inc. operating unit.

“Borden, Inc., with sales of approximately US$5.9 billion in 1995, is a diversified producer of dairy, pasta, snacks and other packaged grocery products; consumer adhesives and dairy, pasta, snacks and other packaged grocery products; consumer adhesives and wallcoverings; and adhesives, resins and plastic products for packaging and industrial uses. Headquartered in Columbus, OH, and privately owned since March 1995 by partnerships affiliated with the investment firm Kohlberg Kravis Roberts & Co. (KKR), Borden employs about 27,500 people and operates 180 plants worldwide.” (“AEP Industries/Borden packaging combination announced”, press release by AEP, 20/6/96, http://www.aepind.com/newsletters/jun-20-1996.html.)

AEP is not above looking for government assistance when it is available. On 12/7/95 it applied for “Transitional Adjustment Assistance” (TAA) under NAFTA. This assistance is available if (note the euphemism) “workers separated from employment after December 8, 1993 (date of enactment of Pub. L. 103-182) are eligible to apply for NAFTA-TAA under Subchapter D of the Trade Act because of increased imports from or the shift in production to Mexico or Canada” (ref: http://www.ici.coled.umn.edu/register/labor/10-16-95lab/lab9.html). One such application was turned down (http://www.ici.coled.umn.edu/register/labor/9-4-95lab/LAB19.html), but another approved for Worker Adjustment Assistance for “worker separations” in South Hackensack, NJ and Moonachie, NJ on 12/6/94 (http://www.ici.coled.umn.edu/register/labor/9-25-95lab/lab2.html).

P&O has lease on Otahuhu land belonging to James Kirkpatrick Ltd

NZL Industrial Park Ltd (NZLIP), which is owned by Peninsula and Oriental Steam Navigation Company of the U.K., has approval to acquire a lease of up to six years over ten hectares of land in Manu Street, Otahuhu, Auckland, owned by James Kirkpatrick Ltd. It already has a lease over this land and a further three adjoining hectares, and this is a “rearrangement” of its interest. It will pay $100,000 a year for the lease of the land, on which it runs its business, and will redevelop an unused part of it.

Bridgestone Japan (Firestone) takes 100% of Bridgestone Tyres (NZ) Ltd

Bridgestone Corporation of Japan (BSJ), which is the parent company of Bridgestone/Firestone Inc. of the United States of America, which in turn owns approximately 80% of the capital of Firestone NZ Limited, has approval to acquire 100% of the shares in Bridgestone Tyres (NZ) Ltd (BSNZ) for an orginally suppressed amount. On appeal to the OIC, it revealed in April 1997 that the amount was $19.5 million.

“BSNZ for many years has been the independent and exclusive distributor in New Zealand of Bridgestone tyres. These are imported from various members of the BSJ Group throughout the world. The current distribution agreement between BSJ and BSNZ is due to terminate in December of this year.”

Walter Bau-AG of Germany readies for Britomart construction

A company hoping to construct the controversial Britomart Transport Centre in Auckland has approval to commence its construction and civil engineering business. Walter Bau-AG of Germany, which owns 75% of Concrete Constructions Group Ltd of Australia, is setting up Walter-Concrete Constructions (Britomart) Ltd, of which it will own 30% and its Australian subsidiary will own 70%. The company “has entered into a contract for the construction of an underground carpark, bus and rail interchange facility in central Auckland, to be known as “The Britomart Transport Centre”. Aucklanders may be surprised at this, because the Auckland City Council was not due to make a decision on the project until November. Their proposal was for the project to be developed by NatWest Markets Australia, a subsidiary of the National Westminster Bank. The Council says:

“Council established basic principles in December 1995. After reviewing competitive submissions from developers it signed a Heads of Agreement with NatWest Markets Australia in May this year. NatWest Markets in turn has put together finance packages and obtained a fixed price construction contract conditional upon the Council signing the final contract … NatWest Markets, is employing the contractor, and taking the major financial, construction and development risks.” (Ref: Auckland City Council Web server, http://www.akcity.govt.nz/CityScene/199611/041196/britomart/consider.htm)

It describes the development process as follows:

“Step One

“Auckland City Council sells the Britomart site to NatWest for a fixed price of $56 million.

“Step Two

“NatWest Markets hires construction companies Walter Bau ag and Concrete Construction of Australia [sic] to build the first stage of the development on a fixed price basis. This includes excavating the site and building the transport centre to the Council’s specification together with underground carparking and other services for the above ground sites owned by the developer. The builders will also underground a section of Quay Street adjoining the Britomart, and carry out essential work under Customs Street for the Council at the same time.

“The builders strengthen and secure the ten historic buildings being preserved and run services – water, electricity and sewerage – to each of the new building sites created on the roof of the transport centre, at ground level. These sites will be landscaped until development starts.

“Step Three

“Council buys the finished transport centre for a fixed price from the developer on completion, and also pays a fixed price for the Quay Street undergrounding, the work under Customs Street, the public open spaces and some Heritage protection. This will happen in 1999, or when the works are complete and not before. The Council makes no progress payments during construction.

“Step Four

“Meanwhile the developer has been busy offering the new ground level sites for sale to developers internationally. Development of any of the sites can commence as soon as work begins on site.

“It is intended that all of the above ground development will be completed within 10 years.

“The developer is able to offer any unsold sites back to the Council in 10 years time, but on terms so [sic] advantageous to the Council.” (Ref: http://www.akcity.govt.nz/CityScene/199611/041196/britomart/borrow.htm.)

The many critics of the scheme, which include a cross-section of the Auckland population, point to the encouragement it gives to use of the private car over public transport in an already congested city centre, destruction of historic sites, the cost of the development (reminiscent of the Birch/Muldoon Think Big projects), the secrecy and lack of genuine consultation, and the crassness of yet more mirror-glass in the area.

Waihi gold mining companies buy three more blocks of land in Waihi

As in February and March, more land is being acquired for the Waihi Gold Mine in and around Waihi. The purchase of three blocks of residential land has been approved from five private individuals: 0.0940 hectares (no address given) for $230,000; 0.3667 hectares (no address given) for $130,000; and 0.0625 hectares at 11 Haszard St for $60,000. The purchases are all by Waihi Gold Company Nominees Ltd of Australia, which “holds rural and urban land in and around Waihi as trustee for the participants in the Waihi Gold Mining joint venture.” It is owned 28.35% each by Waihi Mines Ltd and Welcome Gold Mines Ltd, 27.84% by AUAG Resources Ltd, and 15.46% by Martha Mining Ltd. All of these companies are Australian owned except AUAG Resources, which is owned in Aotearoa.

“The property is being acquired to enable the extension of the existing mining operation. … The proposed extension of the mine will extend the life of the mine for an additional seven years (approximately) and this will result in continued employment for the 165 people employed in the operation. The applicant states that the extended operation will entail the further investment of significant development capital.”

Housing development of 200 dwellings at Gulf Harbour, Whangaparaoa

In May 1996 we reported on new developments with the Gulf Harbour Marina. Gulf Harbour is at Whangaparaoa on the Hibiscus Coast. This month, Hibiscus Hills Ltd, owned by Investors Realty Group Properties Pte Ltd (IRG) which is incorporated in Singapore but has owners from Singapore and Malaysia, has approval to buy ten hectares of land from Gulf Harbour Ltd for $10,000,000. Gulf Harbour Ltd is 95% owned by “Messrs Goh, Sim and Tay of Singapore“. These are presumably the Goh Cheng Liang (55%), Sim Lai Hee and Tay Kwang Thiam (20% each) named in May.

“IRG is an experienced developer of integrated residential housing estates overseas … the land is surrounded by holes 2-9 of the international class Robert Trent II designed golf course at Gulf Harbour. It is the applicant’s [IRG’s] intention to develop and sell a high quality housing estate (approximately 200 lots), which will incorporate community club facilities with a business centre and recreational areas.”

Land for forestry

• Deborah Miller of Brookfields, Auckland is hard at work again. This month she has organised
• • The sale of another block of land in Paponga Road, Broadwood, Far North District, Northland to Jadebrook Developments Ltd, owned by four Taiwan residents. It is of 40 hectares for $201,000. It is being sold by the by now familiar Far North Afforestation (NZ) Ltd. The last such sale was in June 1996.
  • The sale of three further blocks of the Mahuri Forest, Mangamahu, Wanganui to residents of Taiwan, all of whom have been granted permanent residency in Aotearoa. The blocks are 21 hectares for $86,018, 27 hectares for $105,554.50, and 22 hectares for $85,885. In each case the land is being sold by the New Zealand Forestry Group Ltd which, in the first two cases, will develop the land for forestry. In the third, the purchasers, the Lu Family Partnership, have “employed a New Zealand based manager to establish and run the forest on their behalf” but the manager’s identity is not stated. Miller’s last such sale was in July 1996.
  • The sale of 86 hectares of arable land at Galatea, Bay of Plenty. See “other rural land sales” below.
• Blakely Pacific Ltd, as trustee for the South Blakely Trust of the U.S.A., has consent to acquire 45 hectares of land “known as the Waterfall property” in Crawford Road, Tauranga, Bay of Plenty, for a suppressed amount. The amount was made public in April 1997 after appeal to the OIC: $285,000. Blakely Pacific “have previously been granted consent to acquire in excess of 6,594 hectares of land for forestry operations”. See the September 1996 decisions for the last such one. The 6,594 hectares does not include that one: they claimed they only had 6,594 then, and acquired an additional 1,849 hectares (in Otago) by that decision.
• Carter Holt Harvey Ltd, owned “approximately 51%” by International Papers of the U.S.A., has approval to buy 24 hectares of land at Managhopai (sic), Hawkes Bay, for $12,500 for forestry.

Other rural land sales

• North Star Racing Ltd, which is owned 50% by a Swedish national residing in Singapore, and 50% by a New Zealander, has approval to buy eight hectares of land in Tamure Place, Ruakaka, Whangarei, Northland for $155,000 from the Whangarei District Council for development as a racehorse breeding, training and grazing operation.
• A resident of Malaysia who has “the ultimate intention of residing on the property and personally managing the farming operation” has approval to buy 144 hectares of arable land at Clevedon, Waikato for $3,425,000. A lease over the land will continue until it expires in June 1997. “In the longer term the applicant proposes to establish a forestry operation on the less productive and steeper areas of the property. It is further proposed to undertake beef production including experimentation and development of breeds of cattle (particularly Limousin cattle) for beef export purposes.” No evidence is given that the applicant has such expertise.
• The Tainui Maori Trust Board’s subsidiary, Tainui Development Ltd, is selling four hectares of land in Sylvesters Road, Hamilton, to CDL Land New Zealand Ltd for a suppressed amount, for residential subdivision. The amount was revealed in April 1997, after appeal to the OIC, to be $500,000. CDL Land is a wholly owned subsidiary of CDL Investments New Zealand Ltd, which is 57.36% owned by CDL Hotels New Zealand Ltd, which in turn is 69% owned by CDL Hotels International Ltd, which itself is 51% controlled by the Hong Leong Group of Singapore.
• As noted above, Deborah Miller of Brookfields, Auckland, has organised the sale of 86 hectares of arable land at Galatea, Bay of Plenty to Agnes Developments Ltd, owned by a resident of Taiwan and his family “who have made application for permanent residency and intend residing permanently in New Zealand”, for $960,000. “They propose converting the property which it is claimed is an uneconomic beef and wool operation to a dairy farming unit.” They propose engaging a New Zealand expert to carry this out.
• A resident of Taiwan who, “together with his supporting family, will all take up New Zealand permanent residency by mid 1997” has approval to acquire 127 hectares of land in Sunnex Road, Rotorua, Bay of Plenty for $2,800,000. The land is currently used as a “riding establishment” and has been “partially developed as a farm stay destination”. The new owner proposes to “develop the operation as a destination for overseas tourists using connections that they have both in Taiwan and Mainland China.” They propose spending “in excess of a further $500,000 to enhance the accommodation and catering facilities on the property in a bid to entice overseas tourists.”
• In a decision largely suppressed, a party “predominantly owned” in Aotearoa, has approval to buy 150 hectares of land from the Ben Ohau Station Ltd, adjacent to and surrounding the Pukaki Airport, three km north of Twizel, Otago for an amount “yet to be determined”. Why an application to the OIC was required is not explained, and even some details of the “benefits” of the investment have been suppressed.