June 1998 decisions

June 1998 decisions

Auckland International Airport sold

The majority privatisation of Auckland International Airport Ltd, owner of Auckland International Airport, Mangere, Auckland, is approved in two separate decisions. The airport, the largest and busiest in Aotearoa (78% of international visitors arrive or depart from it according to the Press, 2/7/98, “Investors check in for Auckland airport float”, p.26), includes “approximately 1,501 hectares” of land which adjoins the foreshore and contains two buildings listed on the Historic Places Register.

The airport was owned as follows:

The Crown – 51.6%
Auckland City Council – 25.8%
Manakau City Council – 9.6%
North Shore City Council – 7.1%
Waitakeri City Council – 3.7%
Franklin District Council – 1.2%
Infratil Investments Limited – 1%

The approvals relate to the sale of the Crown’s majority 51.6% share.

The two decisions are firstly, for undefined “persons who may be ‘overseas persons’” to acquire “25% or more” of the company (despite the government’s stated intention to keep overseas ownership below 25%); and secondly for the international investment banks organising the sale to acquire the entire 51.6%. The latter is presumably for technical reasons. The banks are Merrill Lynch and Company Inc. (U.S.A.), Credit Suisse First Boston Corporation (Switzerland), and ABN Amro (Netherlands). The price in both cases is “to be advised”, but the market value was estimated to be “in the vicinity of $500 million“. The government actually realised $390 million (Press, 28/7/98, “Airport shares power up for take-off”, p.26).

The government also squeezed the company before sale, which distributed $135 million to its shareholders from retained earnings and increased debt, threatening its debt rating with Standard and Poor’s, but adding $70 million to the government’s sale proceeds (Press, 25/5/98, “Auckland Airport payout threatens credit rating”, p.30).

The sale ran immediately before that of Wellington Airport, which was the trigger for the collapse of the Coalition Government. It attracted only slightly less controversy. For the first time in the central government’s privatisation program of the last fourteen years, it was carried out by a public offering of shares rather than by tender. The process was “one of the largest offerings of shares ever conducted in respect of a New Zealand company” involving a toll-free 0800 number and widespread distribution of the investment statement (abbreviated prospectus) through NZ Post shops. It was intended to “result in achieving a maximum participation by New Zealand investors”. In other words it was an exercise in emulating Margaret Thatcher in trying to create “popular capitalism” and maintain 75% local ownership. It will probably fail on both counts. Most of the New Zealand investors, who received only tiny packets of shares, will sell them very quickly as has happened in local government privatisation share allocations, particularly as a heavy capital investment program is expected for the airport in the next decade. The shares will – like 60% of the sharemarket – end in overseas hands.

The share allocation did succeed in attracting first-time investors, in numbers described by one stock broker as “amazing”. The government guaranteed a share allocation to all New Zealanders applying. The minimum they could apply for was $1,000 worth of shares (Press, 2/7/98, “Investors check in for Auckland airport float”, p.26). The ANZ Bank announced loans for people wanting to buy, attracting criticism from politicians and academics (Press, 8/7/98, “Loan for shares attacked”, p.1). In the end 68,000 New Zealanders bought shares, with 48,000 new to the sharemarket according to the government. Of these, 55,000 were issued from a public pool of shares. All received the minimum (and uneconomic) $1,000 parcel (556 shares). Indicating the type of investors attracted, 30% had asked for only $1,000 and another 30% for $2,000 worth. Another 12,400 privileged investors received shares through a $10 million broker pool. They averaged $8,000 shares per person. All transactions were provisional until the international share offer had completed.

Individual investors ended up with just a quarter of the shares they applied for, and 22.1% of the company. Institutional investors within Aotearoa received 18% of the shares they asked for and got 9.9% of the company. Overseas investors took about 40% of the shares offered, giving them an initial 20.6% of the airport company, though it was clear from the huge oversubscription within Aotearoa that no sales overseas were needed to sell all the shares on offer. (Press, 28/7/98, “Airport shares power up for take-off”, p.26; 29/7/98, “Airport in cruise mode with 13.9% first-day gain”, p.28).

The first problems occurred over the mass advertising campaign for the float. Even ACT leader Richard Prebble, displaying the hypocrisy he has made a trademark of his career, feigned unhappiness that the advertisements implied that only New Zealanders could apply. (The advertisements featured former All Black captain Sean Fitzpatrick.) In fact a separate float to overseas institutions was taking place. In a statement only a politician could understand, Prebble protested: “That statement is more than false. It’s untrue.” He took his complaint to the Advertising Standards Authority (advertising pros may also understand such logic) (Press, 7/7/98, “Airport advert claim ‘untrue’”, p.7). He also took complaints to the Registrar of Companies and to the Securities Commission – and called for its abolition when it refused to act (ACT Press release 20/7/98). However, National Business Review, usually unfailing ACT loyalists, rapped him over the knuckles for his unashamed populism.

Alliance leader Jim Anderton complained to the Commerce Commission for similar reasons, with the same results (Press, 21/7/98, “Airmail may be too late to catch airport”, p.24).

However there was some truth in Prebble’s and Anderton’s claims that the advertising was misleading. While it was advertised as a share issue for all New Zealanders, in fact it was their share allocations that were scaled back rather than reduce the allocation to foreign investors. Prebble also pointed out in his letter to the Registrar of Companies (5/7/98) that “the deal has been structured so that Merrill Lynch have an incentive to offer shares to foreigners rather than New Zealanders. On page 102 of the prospectus it is stated that Merrill Lynch will receive 2.5% commission on foreign sales and 0.5% commission for sales to the New Zealand public.” Share brokers added weight, saying “at least half of the shares will end up in institutional and overseas investors’ hands”, not to Kiwi small shareholders as the government claimed (Press, 3/7/98, “Brokers dismiss PM’s airport holdings claim”, p.33). In fact more than half did.

Investment analyst Brian Gaynor criticised the deal for expecting investors to put up their money without knowing the value that would be put on the shares (Press, 1/7/98, “Airport issue pool topped up for public”, p.30). Sharebrokers were unhappy about the lack of shares allocated to them, and domestic institutions furious about the scaling back of their shares (for example New Zealand Herald, 28/7/98, “Allocation of airport shares angers AMP”, by Geoff Senescall).

Chris Lee (Press investment columnist) called the float a farce.

“The fact is that only the favoured clients of a few major brokers were allocated sensible parcels of shares. Merrill Lynch, small here and new, decided which brokers should get sensible allocations based on some criteria invented by the Government or ML. Others to get sensible allocations were overseas investors, who are unloading most of the 50 million shares they scored, making a fat profit at the expense of the New Zealand institutions. Clever eh!…

“The Auckland International Airport float used a method that has made a bundle for Merrill Lynch, a bundle for the international investors (who scored 22% of the shares), and it made a few bob for Sean Fitzpatrick and the other beneficiaries of the record-breaking advertising and printing bill that sucked in so many first-time investors. It has made next to nothing for small punters, and because the airport was eventually sold at a discount to market value, the sale has made too little for the vendors – us, the taxpayers.” (Press, 10/8/98, “Lessons from Auckland Airport share float”, p.25.)

Lee’s last comment reflects the fact that the share price rose 13.9% (from the 180 cents issue price to 205 cents) on the first day of trading. Those profits were almost certainly made by overseas and institutional investors: individual investors had not by then received the reference numbers required to organise sales.

Lee’s comments are among the few that focus on the lack of integrity and the conflict of interest in this and previous privatisations. A further issue is that Merrill Lynch both advised the government on the sale (it recommended privatisation, to no-one’s surprise) and then profited from organising the privatisation process.

The reasons the government gave to the OIC for the privatisation were the need for increased investment in the airport, risks in the increased property development required, using the proceeds to reduce government debt, and a statement that “investments in airports such as Auckland International, are best made by the private sector”. Leaving aside the opportunity to reduce debt, the other reasons would seem to argue strongly against the float.

The need for increased investment, if a big issue, also makes it an unsuitable investment for most small investors as the returns are likely to be low. The government can’t have it both ways. But the government has exaggerated this, saying an “estimated $1 billion in capital works [are] required at the airport over the next 20 years”. But the prospectus lists up to $100 million in the next two to three years on runway repairs; around $100 million on a new domestic terminal in the medium term; and about $300 million over ten years for a second runway. The company expected to fund that out of cash flows (Press, 11/7/98, “Heavy airport costs no bar to investment”, p.21). The $1 billion over 20 years (if true) is very likely manageable from the company’s own resources.

If it is true that there are “risks” in the “greater focus on property development”, then they were not properly explained to the investors. In fact, the statement is exaggerated or untrue: given the company’s monopoly position, the investment risks are extraordinarily low. The more likely outcome is a risk to the region (and given the airport’s importance, the country) from the privatised company using its position to increase charges.

A company owned by myriad small investors and by institutions will be run by its managers (who could equally well be employed by a publicly owned enterprise), so it is hardly credible that it will be best managed in this way rather than subject to some representative control. The statement that “investments in airports such as Auckland International, are best made by the private sector” has scant evidence. Auckland will be the only listed airport in the southern hemisphere, and among only five listed airports in the world: British Airports Authority, Rome, Vienna, and Copenhagen (Press, 1/7/98, “Airport issue pool topped up for public”, p.30; 3/7/98, “Brokers dismiss PM’s airport holdings claim”, p.33). There are considerably more privatised airports around the world – but there is minimal long term experience of their effects.

In the end, the logic of the sale escaped most people except the investment banks, sharebrokers and institutions making their margins on the sale. As Paul Little, editor of the Listener put it:

“If we can’t own and run something as basic as an airport, perhaps we should just stop pretending to be a country, close the place down and all go and live somewhere that takes itself seriously and has enough respect for its inhabitants to inform them when they’re being done over.” (8/8/98, “Flights of fancy”, p.7.)

After all, Auckland airports had been run by government and local governments very successfully for sixty years.

Novartis “enables rationalisation” of animal health industry: buys Youngs

We documented the merger of Ciba-Geigy Ltd and Sandoz Ltd, both of Switzerland, into Novartis, in August 1996. It was then said to be the “largest merger ever”, but that record has since been broken a number of times. The new company was to have a market value in excess of US$60 billion, making it the second-largest pharmaceuticals company in the world, with a market share of 4.4%, sales of 14 billion Swiss francs, and in its own words, “number one worldwide position in life sciences”.

Sterling Grace of the U.S.A. takes over Claymore Asset Management

Sterling Grace L.D.C., owned by members of the Grace family of New York, U.S.A., has approval to acquire a further 25.6% of Claymore Asset Management Ltd, a “New Zealand resident company” in which it already had a 24.2% shareholding, for $720,000. Claymore owns Stableford Investments Ltd, which in turn owns Spicers Portfolio Management Ltd.

“Spicers is a funds management company offering tailored investment options to its customers in New Zealand. It is stated the proposal provides Claymore with development capital and continuity of ownership necessary to ensure that the company has the financial resources required to compete in an every increasing competitive marketplace. It is also stated that Claymore will continue to be operated and controlled from within New Zealand at all times following the proposed acquisition.”

Claymore Asset Management Ltd is a rather strange company according to its New Zealand Companies Office record. It has only one share, held jointly by two of the directors, Craig Dawon and George Kerr. The directors include James Livingstone Reeves of New York. So it is not clear how the current 24.2% is held by Sterling Grace.

We can find little on Sterling Grace, other than that Forbes reported in 1997:

“Khaled Sobhy, vice president of Middle East operations at Sterling Grace Capital Management, recently invested more than $5 million in Egyptian stocks on behalf of brothers John Grace and Oliver Grace Jr., after two years of research. What made them jump? The privatisation last May of a big Cairo real estate development company.

Word in Cairo was the government would sell 10% of its holding to the public and 10% to employees, but in the end 75% was privatised. ‘That showed the government is finally serious about ceasing to be an obstruction,’ says Sobhy.” (http://www.forbes.com/forbes/97/0421/5908376a.htm)

A Claymore Group with a subsidiary called Claymore Asset Management Ltd has a Web page at http://www.claymore.tc. “What does ‘tc’ stand for?” I hear you cry (it normally stands for the country of origin, except in the imperial U.S.A.!). It doesn’t stand for “tax cover” though it might as well. The page states:

“The Claymore Group is a diversified financial services group offering a range of financial, investment, insurance and management services to overseas and domestic businesses and individuals.

The Group offers high return on investment opportunities within the zero tax domicile of the Turks and Caicos Islands and a full range of international investment opportunities and services in major markets.

Each Group company operates autonomously but at Group management level we are able to ensure cooperation between the member companies and to provide overlap where one event or transaction can benefit from expertise in another member company.”

We don’t know if the Turks and Caicos Islands group is connected with the New Zealand one.

Symantec takes over Binary Research for $52 million

Software manufacturing giant, Symantec Corporation (or Symantec Ltd), has approval to acquire the assets of Binary Research Ltd and its subsidiary Binary Research International, Inc. for $52,370,977. According to the OIC,

“Symantec is a world leader in utility software for business and personal computing and is the seventh largest software company in the world. It is advised Symantec currently has a very small sales office in New Zealand and the proposed acquisition of the business assets of Binary Research Limited will significantly increase Symantec’s presence in New Zealand. Furthermore, it is stated the New Zealand Office of Binary Research Limited will become a software development office for Symantec and most of the existing employees of Binary Research Limited will be retained. Additionally it is stated the proposal provides for the introduction of further capital for development purposes and will significantly increase the sales of Binary Research Limited’s software products as part of the Symantec product line.”

Binary Research had created a product called Ghost, which considerably simplifies the management of networked computers which are the basis of most large organisations’ computing. Ghost allows a standard image of a computer’s hard disk to be made and then “cloned” to other computers over the network. The management of such computers is highly labour intensive without software such as this. Symantec estimated the market for disk cloning software had grown from $US1 million to $US16 million just from 1996 to 1997. According to a Symantec news release, “Ghost is the clear leader in the disk cloning market with more than 3.5 million seats installed in the last 18 months. The product is used by more than half of the Fortune 500” and also many university computer laboratories. It is part of Symantec’s strategy “for serving corporate customers”, under which it recently announced an alliance with IBM.

About half the price of buying out Binary Research will be written off as R&D expenses. Symantec also owns the popular Norton brand of utility software, and Ghost will be marketed under the Norton name in future. Symantec’s other products include ACT!, Mobile Update, pcANYWHERE, Visual Café for Java, Visual Page, and WinFax. (Press, 29/6/98, “Symantec buys BRL for Ghost”, p.28; Symantec news release, “Symantec Acquires Ghost, Expanding Corporate Solutions Set”, 24/6/98, http://www.symantec.com/press/n980624.html; http://www.symantec.com/cgi-bin/menu.cgi).

Sanga takes over SolNet, exclusive agency for Sun computers

Sanga International Inc. of Canada has approval to acquire SolNet Technologies Ltd in from the McNae Family Trust for $18,000,000. SolNet is the exclusive independent sales agent for Sun Micro Systems New Zealand Limited within Aotearoa. “Sanga believes SolNet has an excellent management team which is expected to add to the overall value of the business globally as well as within New Zealand.”

The majority shareholder (52.8%) of Sanga is Ventures North International Inc. which in turn is ultimately owned by the Majere Group of Companies Limited, which is ultimately owned by the Maine Family Trust, the trustees of which are Shane Main and Shaun Main, who are both Canadian citizens.

Noahs buys Lakeland Hotel in Queenstown

Noahs Regency Hotel Ltd, owned by Amalgamated Holdings Ltd of Australia, has approval to acquire the Lakeland Hotel in Queenstown, Otago, from Lakeland Tropical Resorts Ltd of Singapore. The price was originally suppressed but released on appeal in October 1998: $25,000,000. Lakeland Tropical Resorts is owned by Kwon Ping Ho and Te Hwee Liang of Singapore.

“It is stated the applicant’s parent company, Noahs Hotels (NZ) Limited has a substantial presence in New Zealand through its operation of hotels in Auckland, New Plymouth, Rotorua and Christchurch. The applicant wishes to re-establish a business presence in Queenstown. To achieve this, Noahs’ have decided to own and operate a Queenstown hotel of the quality of the Lakeland Hotel which it has previously owned and which it has managed for the preceding five years.”

In October 1993 we reported:

A Singaporean controlled company, Tropical Resorts Ltd, has approval to buy the Lakeland Hotel in Queenstown for approximately $14,787,916. “The Commission is advised that the shareholders of Tropical have extensive investments in the tourism and related industries and view the acquisition as an opportunity to extend their activities into New Zealand. The applicants state that they will undertake a significant refurbishment of the hotel which is required to maintain the hotel’s position in the strengthening three to four star tourist market of Queenstown. The Commission is further advised that Tropical will market the hotel and New Zealand in general through its marketing group in South East Asia. The vendors of the hotel (Noahs Hotels Ltd, which is part of the Amalgamated Holding Group of Australia) have advised that their cash flows did not permit them to undertake the much needed refurbishment. The Commission is further advised that the vendors will be retained to manage the hotel and that they view this as an ideal situation being able to maintain control of the property by way of a Management Agreement without the risks associated with a continuation as owner.” The owners of Tropical Resorts are Wah-Chang Group of Singapore (40%), Chang-Fung Company Ltd of Hong Kong (12%), Natsteel Resorts International Ltd of Singapore (19%), Japan-Asia Investment Company Ltd of Japan (19%), and Asian Strategic Capital Ltd of Hong Kong (10%).

Six thousand hectare Poronui Station sold by Carter Holt to U.S. investors

Approval has been given for the sale of the 6,334 hectare Poronui Station, 44 kilometres from Taupo, Waikato, to Poronui Station Ltd which is owned by Mark Christopher Blake (56%), Wendy Margarete Blake (33%) and Todd Austin Blake (11%), all residents of San Francisco in the U.S.A. The vendors were two subsidiaries of Carter Holt Harvey Ltd (itself a subsidiary of International Paper Products of the U.S.A.), Matapapa Farm Ltd, and Pokirikiri Farm Ltd. CHH has retained ownership of forests which are on part of the land. The sale price was originally suppressed but released on appeal on October 1998: $7,000,000. The station adjoins land held for conservation purposes. It will be used for tourism as well as forestry.

The station is currently the focus of commercial deer hunting and trout fishing operations. One company, Helisika, operates “wilderness hunting and fishing trips” from the station, which was the original liberation site of Sika deer in 1905. It operates two Hughes 500 turbine helicopters (ref http://taupo.com/hunting/helisika.html). Fishing at “Poronui Ranch” is advertised on a number of Internet sites overseas.

One Rotorua angler was not happy at the sale or how it was carried out. He wrote on a fishing and hunting bulletin board:

“I just wonder how other anglers feel about real estate companies who advertise properties for sale by emphasising things like ‘beautiful trout stream’, ‘your own private river’, ‘trout stream, tourist potential’, or ‘great for lodge, river runs through property’. I for one am tired of them promoting the tourism potential of what is a public fishery. The end result is that tourist operators do buy the property and then capture the public resource by not allowing anyone to cross their land to the river except their clients. I say boycott them.

I read in the paper that Poronui is to be sold. The real estate company is promoting it as having wilderness fishing and tourism potential. Anglers have been denied access to this prime fishing water for too long because of greedy tourism fishing guides. Now the real estate companies want to try and sell it to more tourist operators. Its about time we anglers took a stand. I for one will never buy any land from Bayleys Real Estate while they continue to promote places such as Poronui Station as in such a way as to imply a private fishery could be had. Join with me and Boycott them.” (http://www.fishnhunt.co.nz/bulletin/messages/7.htm)

The OIC’s lengthy “rationale” for the approval does not allay these fears:

“It is stated the property is currently predominantly used for forestry purposes (approximately 2,704.4 hectares), with a smaller area (approximately 70.8 hectares) being utilised for beef and deer farming, together with recreational trout fishing and deer hunting sports. A further area of some 1,000 hectares is utilised for pastoral grazing. The remainder of the property is primarily steep hilly terrain, upon which both native bush and scrub is located. The native bush is to be protected by a registered encumbrance that will prohibit it clear felling or milling.

Carter Holt Harvey (CHH) has decided to divest its interest in Poronui Station, thus forming the basis of this application. CHH state there are several reasons prompting the sale including:

1. Poronui is peripheral to CHH’s Tokoroa and Hawkes Bay forest estates;
2. Poronui is not a highly productive site owing to its altitude and harsh climate;
3. CHH does not view deer farming and tourism as businesses in which it has experience or expertise; and
4. the underlying land value is higher than is justified for forestry at Poronui.

Accordingly, Poronui was offered for sale by a tender process and was widely marketed to ensure that CHH maximised the sale price. It is stated the proposal will allow CHH to release capital for further investment elsewhere in its forestry and processing business in New Zealand while retaining (under a forestry right) the ownership of the pinus radiata and douglas fir forests contained on part of the land. Additionally it is stated the proposal will allow the development of the tourism potential of the property, something that would not otherwise have happened under CHH’s current ownership.

Poronui Station advise they will introduce substantial additional capital to develop the existing fishing hut facility, which consists of three removable buildings, to a world class sporting lodge. The sporting lodge will be developed to allow for accommodation of up to 20 guests and will be open seven days a week for a period of eight months of the year. The lodge will be utilised as a base for guided trout fishing and sika deer hunting. Additionally it is advised eco-tourism will be developed on the property, including nature trails, mountain biking, horse trekking and hiking. It is the intention that the lodge will be opened on the evening of the Millennium, namely 31st December 1999.”

Two applications refused: in Northland and Canterbury

Two residents of Switzerland have had an application refused to acquire land in Northland for a homestay and backpackers lodge. Leroy Downs Ltd owned by a citizen of Canada has had an application to acquire a land for deer farming in Canterbury refused. Neither was “considered to be in the national interest”. Most other details are suppressed in both cases. (Note: the Canterbury refusal was reversed in November 1998.)

Land for forestry

• New Zealand Plantation Forest Company Ltd owned by Chuetsu Pulp and Paper Co, Ltd (30%), Hokuetsu Paper Mills Ltd (30%), Marusumi Paper Co. Ltd (30%) and Marubeni Corporation (10%), all “substantial Japanese companies, involved in forestry and commerce within Japan”, has approval to acquire 233 hectares of forestry cutting rights in Tinopai, Northland for a suppressed amount. “NZPFCL intends to acquire a forestry right over approximately 233.3 hectares of the property for a term of 22 years, for the purpose of establishing a commercial forestry operation on the property.”
• Dr Franklin Daniell and Cassandra Daniell, both citizens and residents of the U.S.A., have approval to acquire 20 hectares of land at Ashton Road, Whangateau, Warkworth, Northland, for $1,150,000 for forestry and lifestyle purposes. “… approximately 40% of the land is currently utilised for afforestation purposes. The applicants intend to develop a further 25% of the property for afforestation … [and] take up permanent residence in New Zealand by 31 August 2000.”
• Yaquina Kiwi Forest Corporation incorporated in the U.S.A. and owned by Fred M. Van Eck, of the U.S.A., has approval to acquire “approximately” 167 hectares of land on Mimiha Road, Matata, Bay of Plenty, for $450,000 for forestry. In April 1996, we reported that “Yaquina Forestry Corporation … has approval to buy 319 hectares of land at Otamarakau, in the Bay of Plenty, for $1,200,000 for forestry planting.”
• Trustwood Forests (Kiteroa) Ltd is selling an interest in a block of land for forestry at Ihungia Road, Te Puia Springs, East Cape, Gisborne, this time “approximately 280 hectares“. A one-third share goes to Vetorino Forestry Group Ltd, owned by Mr Frank Vetorino and Janet Vetorino-Howard, both residents of the U.S.A. for $325,000. A one quarter share goes to Trees Pacifica Ltd, owned by Mr Charles P. Garrison of the U.S.A. for $243,750.

“The land, the subject of this application, forms part of a larger property owned by Trustwood … Trustwood was incorporated solely for the purpose of acquiring the property and developing it for afforestation purposes. The company has entered into several joint venture agreements with other parties, including overseas persons, in order to reduce existing indebtedness and to assist in maintaining the integrity of the development of the whole property as a commercial forest. The proposal represents the last title owned by Trustwood for sale in Kiteroa Station in a joint venture arrangement with a forest partner. It is stated the land is currently planted in two year old pinus radiata trees.”

Trustwood will be responsible for the day-to-day management of the forest and the two companies “substantial development capital”. Trustwood similarly sold interests in its land overseas in October 1997, December 1996 and September 1996.

• Pelorus Properties (NZ) Ltd, a subsidiary of Pelorus Properties LLC owned by David Teece, a New Zealand citizen residing in California, U.S.A., has approval to acquire 413 hectares of land in Maungatapu Road, Rai Valley, Marlborough for $288,000 for forestry planting. “A large part of the property is covered in native forest, most of which is protected by forestry rights granted for 999 years.” Approximately 120 hectares is currently planted in pinus radiata and a local forestry manager will be responsible for the day-to-day management and operation of the property.” The land is being acquired from the Marlborough Pine Corporation Ltd.
• Southland Plantation Forest Company of New Zealand Ltd, of Japan, has approval to acquire 408 hectares of land in Tahakopa Valley Road, Southland for $522,000, for forestry. It adjoins conservation land. Southland Plantation is owned by New Oji Paper Company Ltd (51%), Itochu Ltd (39%), Fuji Xerox Co. Ltd (5%), and Fuji Xerox Office Supply Company Ltd (5%), all of Japan. The company bought 203 hectares in Southland in May and 284 hectares in January 1998.

Other rural land sales

• Carrington Farms Ltd, owned by Carrington Trustees Ltd whose beneficiaries are members of the PHII Group of the U.S.A., has approval to acquire for $38,000, 0.0809 hectares of land at Inland Road, Doubtless Bay, Tokerau Beach, Northland adjoining the 414 hectare property it acquired in 1995.

“Carrington Farms wish to acquire this further parcel of land (0.0809 hectares) in order to improve the access to their beef farming operation. It is stated that since the initial acquisition approximately $700,000 in development capital has been injected in order to improve the property, stock numbers run on the property have increased from nil-840 and four persons have been employed on a full time basis within the farming activities undertaken on the property.”

• Two residents of Japan who have been granted permanent residency in Aotearoa, have approval to acquire five hectares of land on State Highway 10, Kerikeri, Northland for $287,000. They intend to acquire the property as a residential base/lifestyle block on which they will reside permanently.
• Corbans Wines Ltd, a subsidiary of DB Group Ltd which is 58.39% owned by Asia Pacific Breweries Ltd, has approval to acquire 12 hectares of land in Rapaura Road, Blenheim, Marlborough, for $570,000 “in order to secure a supply of grapes for its wine business.” Asia Pacific Breweries is 80% owned by Heineken NV of the Netherlands and Fraser, Neave Ltd of Singapore. It also bought land in Rapaura Road (eight hectares) in April 1998.