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Philippines businessman buys Lyttelton Marina land
Lyttelton Marina Ltd, a subsidiary of Pacific Marina Holdings Ltd, owned by Mr Victor Villavicencio of the Philippines, has approval to acquire seven hectares of land at Magazine Bay Marina, Lyttelton Harbour, Canterbury for $1,250,000. It is being sold by the Banks Peninsula District Council and the Lyttelton Port Company Ltd for a marina development. The privatisation of the marina was opposed by many locals. In February 1998, the OIC gave approval for Pacific Marina Holdings Ltd, to acquire Lyttelton Marina Ltd, Lyttelton Marina Management Ltd, and Canterbury Marina Ltd for $600,000. That included approximately seven hectares of leasehold land, with option to purchase. The Council and Port Company “were not prepared to grant anything more than the lease until they were satisfied that the marina development was definitely proceeding and that there was a proposal for the land to be used for marina facilities and related amenities.” At that stage, the OIC reported that “Mr Villavicencio has significant business experience with marina development and management including a leading interest in the Subic Bay marina development at Subic Bay (north of Manila). … The proposal represents the introduction of approximately $5,400,000 in risk capital which will ensure the development of the new Lyttelton Marina. The Commission is advised the Canterbury area is in desperate need of an upgrade/enhancement to its existing marina facilities. In addition it is stated the proposed development is fully supported by both the Lyttelton Port Company and the Banks Peninsula District Council. The port company and council originally planned to undertake the development themselves however, the initial offer did not proceed.” In fact, despite their enthusiasm then, the money didn’t eventuate. By September 1998, Villvicencio was reported to be “consolidating his interests following the economic downturn”, due to the falling Philippines currency. Lyttelton Marina director, Mark Truscott, was looking for a financial backer. “The original project financing is not there anymore, and it has fallen down on us”, the Christchurch Mail quoted him as saying (22/9/98, “Marina company for sale”, p.5). He was “negotiating a new financial package”. While the OIC has never mentioned another party to the development, the Christchurch Mail says that “after a collapsed share float scheme, Pacific Smith Marina Holdings Ltd became the developer of the marina project in a joint venture between McConnell Smith and Pacific Marina International Ltd, a big developer of marinas on the east coast of Australia.” Work on the “$6 million” marina project had started the previous year. Chris Hutching also reported at about the same time that “from the outset the scheme to replace the decaying Magazine Bay tyre breakwater has been dogged with resistance from local boaties”. He quoted Truscott complaining there had been only about 20 berth sales over the past 12 months. Fellow director, Martin Ford had left, having spent “the best part of 18 months trying to float the marina” [sic!]. Truscott was the major shareholder in the construction company for the project, Saltwater Marinas. He was trying to develop a “mixed-use commercial building on the leased land adjacent to the marina and he will be seeking support from chandlers, restaurant operators and retailers” which he hoped would help fund the marina. “The biggest hurdle to the marina is the relatively small number of high wealth individuals in Christchurch who use it”, wrote Hutching. “Many of them simply don’t have or aren’t prepared to commit the significant berth investment, which is often equal to the value of their boats.” Hard times all round! Nonetheless, the OIC has apparently been advised that Villavicencio is continuing to back the marina. Villavicencio has substantial interests at home in the Philippines, including marinas and other waterside developments, restaurants and fast food chains. One gushing report on improvements in eating out in the Philippines describes his place in the food chain as follows: “Some of the most popular dining fads have been started by local food entrepreneurs, notably the chain of restaurants owned by Victor Villavicencio. With his familiarity of Filipino taste, Villavicencio started the ‘eat all you can’ buffet selections at his Dad’s, Saisaki, and Kamayan restaurants, which were soon copied by many other restaurants in town. His other restaurants include Triple V Express, Foodome, Islands Fisherman, and the most recent one, 8 Treasures.” (http://g-net.globe.com.ph/~mbc/zine/philbus/1qtr96/agenda.htm, “Vast Food”, by Anna Katherina Moran). His status in the upper reaches (or should that read “riches”?) of Philippines society, as president of the Subic Bay Yacht Club, is implicit in this description of a party inspecting a proposed underwater glass tube connecting Subic Bay to Grande Island as a tourist attraction: “The biggest attraction for local tourists, and even for foreigners, would be the construction of a 500 metre glass tube that would cross undersea from the main point of Subic Bay to the Grande Island. SBMA administrator Payumo discussed the project while we were having cocktails and yachting off Subic Bay, courtesy of Vic-Vic Villavicencio, president of the world-class Subic Bay Yacht Club (SBYC). The affair was organized by Mrs. Daisy Payumo, wife of SBMA administrator Payumo. House Speaker Manuel Villar led the guests composed of House representatives…. ” (http://www.mb.com.ph/tour/9812/03db44b.asp, Manila Bulletin, “Construction of undersea glass tube between Subic and Grande isle set”, by Leonardo Belen.) According to the Manila Bulletin, the yacht club itself (the SBYC) “… glitters with an aura of royalty as conceptualized by the worldclass interior design firm Hirsch Bedner and Associates. The 39 elegant rooms in the guest accommodations easily outclass even Metro Manila’s fivestar hotels. The Main Clubhouse, mega-Recreation Center, Boathouse, five international fine-dining restaurants, and a 300 berth marina, among other premiere facilities, provide the exciting glamor of Monaco and the family-oriented entertainment of Disneyland this side of Pacific.” It is not just a place where “the movers of modern society, the powerful, the wealthy, and the famous” relax, but also (perhaps primarily) an investment: “In spite of an economic crunch that has dulled a little the glitzy Christmas lights in the country, [broadcasting company vice president, Lito] Balquiedra staunchly expresses his confidence in the SBYC, ‘I know it’s a good investment because Vicvic V. Villavicencio is the project manager of the place. We always refer to him as the local boy with the Midas touch.’” (http://www.mb.com.ph/scty/9812/16dc00e.asp, “Spend a jolly Christmas at Subic Bay Yacht Club”.) Villavicencio built the yacht club in the area of the former huge U.S. Subic Bay naval base. The “Subic Bay Freeport” has been developed as an industrial zone, along with hotel, golf club, and other “leisure investments”, attempting to attract foreign investment which had been going to Hong Kong (http://web3.asia1.com.sg/pl/PROPLINK-5/FILES/philippines.html, Property Link, 1996, “Turning A Major Disaster Into An Economic Reality”). Though the club was not yet completed in October 1997, the Philippine Star (2/10/97, “Subic Bay Yacht Club Has 1,600 Members”, p.22) was reporting that “Sales of proprietary membership at the Subic Bay Yacht Club (SBYC), exclusive marina country club project of businessman Victor Villavicencio, is steadily increasing, with 1,600 members as of this month, SBYC reported yesterday. In spite of reports of difficulties in the economy, Villavicencio’s project is seemingly insulated as prices of shares continue to appreciate from P750,000 to P1.5 million for individual shares and P1.2 million to P2.2 million for corporate shares, SBYC said in a statement… Villavicencio, who chairs the Subic Bay Waterfront Development Corp., credits the company’s performance to the stability of the project, touted to be the biggest and most impressive marina country club in the Asian region.” (http://www.subicnet.com/articles/ni710022.html) Not all glittered at the yacht club however. The Philippines Securities and Exchange Commission imposed a “cease and desist” order on the club in June 1998 when it failed to submit quarterly reports and its 1997 annual report. It barred the club from selling membership shares to the public. The order was lifted only when the club paid a P404,840 fine (approximately NZ$21,000). It was warned that heavier penalties would be imposed should it fail to fulfil reporting requirements again. The club complained that the order was frightening away prospective buyers, including “some prospective foreign buyers who intend to buy SBYC shares in bulk” (Philippine Daily Inquirer, 1/8/98, “SEC lifts cease and desist order on Subic yacht club”).
Farmers Deka gets approval to buy Pacific Retail Group – but loses bid
Farmers Deka Ltd, a subsidiary of Foodland Associated Ltd (FAL) of Australia has approval to acquire all the shares of Pacific Retail Group Ltd for $65,400,000 “subject to any variation of the offer price”. Pacific Retail’s shareholders at the time were Murray International Holdings Ltd of the U.K. with 58.08%, leaving the “New Zealand public” owning the remainder. Those included former managing director, Greg Lancaster (5%), former chairman Sir Roger Bhatnagar (7%), and National Mutual (13.1%). Pacific Retail owns Noel Leeming Ltd, Bond and Bond Ltd, Electric City (1990) Ltd, and Pacific Retail Finance Ltd. The Noel Leeming chain includes the Computer City chain of computer shops. It is the largest appliance and electronic products retailer in the country with 48 Noel Leeming, 40 Bond and Bond, and three Computer City stores, and has about 30% of the appliance market. Farmers Deka has 59 shops (and 10% of the appliance market), but FAL also controls (through its 57.9% ownership) major supermarket owner, Progressive Enterprises, which operates through the Foodtown, Countdown and 3 Guys chains. In the event, while the OIC approved the purchase, FAL’s bid failed because the ubiquitous and ruthless Eric Watson – Blue Star executive chairman – had the deal already sewn up. The questions the sale leaves are why he didn’t act true to form and take a quick profit by selling on to FAL, and how he sewed the deal up at a price generally thought low and beaten by both FAL and the share market. The good news is that company is now back in local hands and its profits will no longer be a burden on the balance of payments – at least until Watson receives a better offer. Watson made his bid for Pacific Retail in December 1998 through Logan Corporation, a subsidiary of his company Cullen Investments, which was fresh from a $25 million profit on the purchase and a quick sale of Dunedin’s United Electricity. He offered 130 cents per share, but virtually sealed the deal before it was even announced by coming to an arrangement with Murray International that it would sell 19.9% if the offer for the rest of the shares became unconditional. Watson said that “synergies with Blue Star had attracted him to Pacific Retail. One of these is that together they are the largest lessees of mall space in New Zealand” giving them negotiating strength at a time of high mall rents. The 130 cent offer, well up on the 80 to 90 cent trading range at the time, valued Pacific Retail at $58.5 million: $7 million less than what FAL later offered. National Mutual considered the offer unfair. So did merchant bankers, Grant Samuel and Associates, who valued the shares at between 149 and 160 cents, and said it could not understand why Murray International had accepted the offer for its 19.9% shareholding. While it pointed out Watson’s offer was only 5.6 times forecast earnings for 1999, compared to the seven times earnings that most publicly listed retailers traded at, that may in itself explain Murray International’s acceptance. Pacific Retail under its control had consistently failed to meet profit forecasts. Independent directors, on advice from Credit Suisse First Boston, advised shareholders to accept Watson’s offer. By mid January, he was claiming that more than 70% of shareholders had indicated they would accept his offer, and by early February, he had received unconditional acceptances for 70% of shares, making it impossible for FAL’s bid to succeed without his co-operation. He stuck to his offer price, despite rumours of the FAL bid and market prices rising to 140 cents. FAL’s bid came on 10 February at 145 cents (still under the Grant Samuel valuation), which would have given Watson a quick profit of $5 million. But it was too late. Uncharacteristically, Watson didn’t take the easy course, even when the Farmers Deka offer was raised to 160 cents a share (valuing Pacific Retail at $72.1 million) ten days later. When his offer finally closed – at an extended date in March – FAL had thrown in the towel, withdrawing its bid, and Watson had 73.98% of the company and declared it unconditional despite originally targeting 90%. National Mutual stood firm, refusing to sell. While the sale does return the company to local ownership, Watson cannot be counted the owner of choice. At the same time as he was making his initial offer for Pacific Retail, the Securities Commission issued a rare critical report, saying that he may have committed a serious breach of the law on substantial security holder disclosure. The finding was in relation to shares he bought in McCollam Printers before its purchase by US Office Products, the owner of Blue Star. The report says Watson and his friends Richard Johnston and Craig Joynt bought 10.13% of McCollam’s shares on their own account between 23/10/96 and 16/5/97, at the same time (mid November 1996) as Watson, as head of Blue Star, was negotiating to buy the company. The three showed their pride in local ownership by holding 7.16% of those shares in the tax haven of the British Virgin Islands. The Securities Commission concluded that there were “reasonable grounds” to suspect that Watson and friends had breached the law by failing to disclose their holding in McCollam. It said: “The commission does not consider that personal trading in these circumstances enhances the reputation and standing of our market.” Because of doubts about the interpretation of the relevant law, it decided against prosecution. However, because Blue Star is a U.S. company, the US Securities and Exchange Commission is also investigating, under much more stringent laws than New Zealand’s. While Watson blamed an oversight by his advisers, he offered to set up a fund equal to the three mates’ $680,000 profit, to be available for claims by the former McCollam shareholders. It is not clear either, that Watson’s management skills go far beyond wheeling and dealing. Blue Star’s owner, US Office Products was described as “distressed” by Deborah Hill in the National Business Review in March, when it suspended its staff share scheme. Problems centred on the fact that 44% of its assets were its intangible goodwill – largely due to the excessive prices it paid for over 200 acquisitions like Blue Star, which is one third of the U.S. company’s assets (National Business Review, 19/3/99, “Anger sparks as Blue Star parent stops staff share plan”, p.15). It sold innovative New Zealand computer assembler and direct marketer, PC Direct, which it had bought in 1996, to U.S. transnational, Gateway. The price made Blue Star a loss of $US7.5 million. It is likely that Pacific Retail staff breathed a sigh of relief when Watson announced he would adopt a “hands-off” approach to the group. (Press, 18/12/98, “Watson ready to take Pacific Retail Group”, p.24; New Zealand Herald, 19/12/98, “Unlovely whiff of insider trading”, by Brian Fallow, and “Bid for stuttering chain hard to understand”, by Karyn Scherer, p.F1; Press, 19/12/98 “Watson slated by watchdog”, p.22; New Zealand Herald, 21/12/98, “Watchdog tries to hang on by gums”, by Rod Oram, p.C1; Press, 16/1/99, “Watson’s bid for Pac Retail ‘unfair’”, p.25; 18/1/99, “Watson holds firm on Pac Retail offer”, p.30; 30/1/99, “Rival bid likely for Pac Retail”, p. 23; 5/2/99, “Watson in driver’s seat at Pacific Retail”, p.27; 10/2/99, “Farmers Deka in Pacific Retail bid”, p.30; 11/2/99, “F&P on hold over Pacific Retail”, p.27; 20/2/99, “Farmers Deka raises Pacific Retail offer; waits for Watson”, p.21; 6/3/99, “Foodland drops PRG bid”, p.21; 13/3/99, “Pacific Retail stake”, p.21; 8/4/99, “’Hands-off’ for PacRetail”, p.26.)
Swiss Lodge buys further lake-front land in Rotorua
Swiss Lodge Ltd, owned by Mr and Mrs Schweizer of Switzerland, has approval to acquire 0.0976 hectares of land at 207A Kawaha Point Road, Rotorua, for $275,000. The land is on the north-western side of Lake Rotorua. In March 1998, we reported that Swiss Lodge Ltd had approval to acquire “approximately 0.1163 hectares” adjoining Lake Rotorua, at 207 Kawaha Point Road, Rotorua for $370,000. This is the primary address of the operation. The OIC now tells us that Swiss Lodge also bought a further 0.3773 hectares at 209 Kawaha Point Road, though we have received no decision approving that. The company has upgraded the house at number 209 and constructed “a substantial home made from Lockwood componentry and design” on the property. It has also built a small jetty on the lakefront of 209 to moor motorboats and enable trout fishing. The acquisition of 207A will allow further development of this tourist operation.
Abel Real Estate of Japan buys Mangapapa Lodge, Havelock North
Abel Real Estate (H.K.) Co. Ltd, a subsidiary of Abel Real Estate International Ltd of Japan, has approval to acquire the Mangapapa Lodge, including six hectares of land, at Napier Road, five kilometres north of Havelock North, Hawkes Bay, for $2,250,000. The property is being sold by Garland and Wagner Holdings Ltd/Mangapapa Lodge Ltd. The lodge is described as “one of New Zealand’s finest small luxury hotels”. So-Con Co. Ltd, which is associated with Abel, bought the Waimarama Estate Winery in 1998 (though we have no OIC decision relating to this). The winery is in River Road, Havelock North, about five kilometres from Mangapapa Lodge. It “currently exports to Japan all of its production and the wine is sold in Japan to parties known to So-Con Co. Ltd and associated companies. These parties will visit New Zealand from time to time as tourists and will spend time at Mangapapa Lodge and Waimarama Estate Winery. The Lodge will still continue for the most part to derive its income from overseas visitors and New Zealanders seeking world-class lodge accommodation.” Abel Real Estate (H.K.) Ltd is “involved in the business of property investment, leasing, property development and property consultancy”.
New Zealand Forestry Group sells further land in Hawera to Taiwan residents
Cheng-Chi Sung of Taiwan has approval to acquire 23 hectares of land at Tangahoe Valley Road, Hawera, Taranaki for $111,746. Similarly, Yi-Chin Chen and Yang Chen jointly have approval to acquire 32 hectares in the same locality, for $154,800. Both purchases are from the New Zealand Forestry Group. For the first time the ownership of the New Zealand Forestry Group is reported: it is owned 76% by W. Garratt of Aotearoa, and 24% by J. Hong of Taiwan. All three purchasers are members of the Hawera Forest Owners Association, which buys land from the New Zealand Forestry Group, contracting it to manage and develop it for forestry. In August 1998 we reported that four members of the Association, which consists of “43 members, of which 21 are ‘overseas persons’”, received approval to acquire a total of 99 hectares of land at Tangahoe Valley Road, Hawera, Taranaki for $423,980 for forestry. Each “member” is two to five people, or, in one case, a limited liability company, Greens Trading Co Ltd. All are domiciled in Taiwan. The seller of the land in each case was New Zealand Forestry Group Ltd. The OIC states that “In essence the proposal is a joint venture between overseas persons who are providing capital for development purposes and a New Zealand forestry company which is providing the necessary expertise to the operation.” The New Zealand Forestry Group appears to specialise in these modus operandi, and has been selling land in Paparangi, Wanganui and elsewhere.
Cleary’s of Ireland buy 626 ha. more land in Southland and 106 ha. in Waikato
The Cleary Family of Ireland, through their company, Athlumney Farms Ltd, have approval to acquire five properties in Southland, totalling 626 hectares, which they intend to convert to dairying. The total price for the properties is $4,692,000. They are:
The first property “represents the best property in Southland that is yet to be converted into dairying”. All properties are currently sheep and cattle operations. They also have approval to acquire 106 hectares at Rodda Road, Te Kauwhata, Waikato for $675,000. Their company, Athlumney Farms Ltd, will purchase “the agricultural area of the property”, approximately 56.9 hectares, for combining with adjoining land the family already owns, and will be used for dairy development. The remaining 49.1 hectares will be sold to The Eire Cattle Company Ltd (also owned by the Cleary family) and subdivided for lifestyle units which are in “significant demand … given its proximity to both Auckland and Hamilton”. Mr Cleary has been granted New Zealand citizenship and “has extensive experience and success in farming in both Ireland and New Zealand”. In February 1998 we reported that Clearwood Developments Ltd, owned 66.6% by E. J. Cleary and family of Ireland, and 33.3% by the K.B. and R.B. Lockwood family trusts of Aotearoa, has approval to acquire a 114 hectare dairy farm on Saulberty Road, Hamilton, Waikato, for $2,000,000 for residential subdivision. They intend to convert ten hectares of it to 33 “farm park” residential lots, each with power, telephone and water, and resell the rest as a dairy farm. In July 1997 we reported that Eire Cattle Company Ltd, owned by the Cleary Family Trust had approval to acquire 50 hectares of land on Plantation Road, Te Kauwhata, Waikato for $462,500 for dairy conversion and merging with the company’s adjoining property. The Trust’s trustees were Mr Eamon Joseph Cleary of Ireland and Mr J. Henderson of Aotearoa. The beneficiaries of the trust were Mr Cleary, his children, and “remoter issue”. The Cleary family also had other significant investments in New Zealand. In September 1996, Clearwood Developments Ltd received approval to buy seven hectares of land then used as a “residential lifestyle block” on Whatawhata Road, Hamilton, for $1,400,000, for residential subdivision. It was given approval to buy seven hectares at Tamahere, Hamilton for $900,000 in April 1996, also for subdivision. In August 1993, we reported that The Eamon Cleary Family Trust (benefiting the Cleary Family of Ireland) is buying a company Luthien Holdings Ltd which owns a 261.5687 hectare property on Hall Road, Te Kauwhata for $1.5 million. The family have applied for permanent residence in Aotearoa, but will be employing a local farm manager and a farm consultant. Mr Cleary is experience in intensive beef fattening in Ireland.
Waihi Gold buys land to “buffer” extended Martha Mine
Waihi Gold Company Nominees Ltd, which is 67.06% owned by Normandy Mining Ltd of Australia and 32.94% by AUAG Resources Limited (equally owned in Australia and Aotearoa) has approval to acquire a further 1.6 hectares of land at Grey Street, Waihi, Coromandel for $114,000. “The company is proceeding with an extension to the Martha Mine that will have the effect of extending the life of the mine for about an additional seven years beyond the current estimated life of the mine of 1999. This extension involves enabling access to be obtained to ore below the level of the currently licensed pit. To reach this ore it is necessary to bench back (or extend) the perimeter of the existing pit, and the additional land is required for this, and to provide a sufficient buffer between the extended mine and surrounding residential uses. Previous consents have been granted by the Commission for the acquisition of such land. The land the subject of this application is currently in residential use, but is directly adjacent to the extended Martha Hill mine licence area, and will be required as a buffer for the extended project.” The last such purchase of land for the mine was in December 1998.
U.S. couple buy Canterbury land for racing stud
Mr E.A. and Mrs C.S. Wardwell of the U.S.A. have approval to acquire G. Dickey (Tavistock) Holdings Ltd for $785,000 from Mr G. E. Dickey, past President of the Canterbury Park Trotting Club. The purchase includes 22 hectares of land at Hoskyns Road, West Melton, Canterbury. The Wardwells owned a standardbred stud and training stable at Aylesbury, Canterbury, which has been sold. They still own nine horses jointly with Mr Dickey. Some of the horses were trained and stabled by trainers Brian and Lynette O’Meara who in 1997 “were to be displaced from their training establishment as their lease had expired and the owner wished to sell the property.” They could not afford to buy it; instead “it was purchased by Mr Dickey, through G. Dickey (Tavistock) Holdings Ltd, with the funds being provided by Mr and Mrs Wardwell as well as Mr Dickey”. |
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