Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – March 2009 Decisions
Transpacific Taken Over: Confidential Decision Released On Appeal
A Decision previously considered confidential by the OIO has now been made public, thanks to CAFCA’s standard policy of appealing every such deletion under the Official Information Act 1982. And it is one of more significant OIO decisions in recent times. Specifically, WP X Holdings BV (Netherlands 100%) has been given OIO approval to acquire up to 50.5% in Transpacific Industries Group Ltd (Australia 80%, various 20%) which has significant operations in waste collection, recycling and landfill operation and ownership in Australia and New Zealand. The acquisition will be achieved via a placement of new Transpacific shares to WP X Holdings. The asset value stated was $1,650,404,064!
Here in New Zealand Transpacific is better known as Waste Management which was bought by Transpacific in a controversial takeover in 2007. See our June 2006 and September 2007 commentaries for more background on this The approval also includes effective acquisition of a freehold interest in a number of sites around New Zealand, including 3,165 hectares at Mt Cass Road, Waipara, (North Canterbury), the site of the controversial Kate Valley regional landfill established a few years ago. Transpacific’s operations in New Zealand have not been without further controversy. Waiheke Island residents asked the Auditor General to investigate the decision making process of Auckland City Council in awarding the island’s waste contract to Transpacific. The Auditor General however sided with the Council. Transpacific’s siting of a recycling depot behind a pub and across the road from a community hall in Waipapa has also drawn criticism.
Back to WP X buying into Transpacific. As reported by www.stuff.co.nz (10/6/09): “After nearly four months in a trading halt ASX-listed trans-Tasman waste and environmental services company Transpacific Industries Group has reached agreement to raise A$800m (NZ$1.018 billion) in equity through an conditional agreement for a placement to Amsterdam-based WP X Holdings BV. WP Holdings is an affiliate of the US$25 billion global private equity firm Warburg Pincus, long tipped as a front runner to be a cornerstone shareholder in Transpacific. The placement puts paid to widespread speculation Transpacific might sell its New Zealand business Waste Management to reduce debt. Transpacific got into financial strife earlier this year after its $150 million of US private placement loans were breached by a non-cash write-down of $115.6 million on interest rate hedges and investments in listed securities. This triggered cross-default provisions in a syndicated $A2.13 billion facility”. On 20/7/09, the Australian reported Transpacific’s Institutional share offer fell short, raising $A560m of a targeted $A737m. A retail share offer was to follow and WP X would take up shares from both its entitlement and as sub-underwriter. “Under its agreement, the maximum percentage of Transpacific shares WP X will own is around 34.3% and the minimum is 19.9%. The exact percentage of the WP X shareholding will be unknown until settlement”.
So let’s have a look at WP X and in particular Warburg Pincus, which has very deep pockets. According to Wikipedia: “Warburg Pincus, LLC is a private equity firm with offices in the United States, Europe, and Asia. It has been a private equity investor since 1966. The firm currently has approximately $US25 billion in assets under management and invests in a range of sectors including consumer, energy, financial services, health care, industrial, media, technology, telecommunication and real estate. Warburg Pincus is a growth investor and its active portfolio of more than 100 companies is highly diversified by stage, sector and geography.
“The firm was founded in 1939 by Eric Warburg of the Warburg banking family under the name EM Warburg & Co. Its first address was 52 William Street, New York, the Kuhn Loeb building. Throughout the early post-war period, the firm remained a small office of not more than 20 employees. In 1965, when Eric Warburg retired to Germany, control was handed to Lionel Pincus, a partner in the Ladenburg Thalmann investment bank, and the working language of the office switched from German to English.
“Warburg Pincus began investing in Europe in 1983 and opened its first office in Asia in 1994. It has invested more than $US5 billion in Europe; more than $US2 billion in India and more than $US1 billion in China. The firm is structured as a global partnership led by co-presidents Charles Kaye and Joseph Landy. Kaye has been with Warburg Pincus since 1986 and worked to launch the Asian operations. Landy has been with the firm since 1985, focusing on investments in information technology, communications applications and structured investments. Approximately 40% of the firm’s investments are outside of the US”.
Decision # 200910051
Aussies Tighten Grip On NZ Retirement Village Business
QPE Funds Management Pty Limited as Manager of Quadrant Private Equity No. 2A and No. 2B Funds Australia (100%) received Overseas Investment Office (OIO) consent to purchase from AMP Capital Investors Limited and AMP Investment Services Pty Limited Australia (91%), New Zealand (9%) rights or interests in 50% of the shares of AMP Capital Retirement Limited which owns or controls: a freehold interest in 5.8937 hectares of land at 166 – 168 Ruapehu Drive, Palmerston North; and
- a freehold interest in 5.9454 hectares of land at 104 Realm Drive, Paraparaumu; and
- a freehold interest in 6.7698 hectares of land at Mansel Drive, Warkworth; and
- a freehold interest in 7.1326 hectares of land at Park Road, Katikati; and
- a freehold interest in 9.6300 hectares of land at Joyce Adams Place, Waimauku.
Consideration for the purchase was stated as confidential. The OIO states: “QPE Funds Management Pty Limited (QPEF) as Manager of Quadrant Private Equity No. 2A and No. 2B funds (the Applicant) is seeking approval to:
(a) acquire 50% of the shares in the AMP Capital Retirement Limited:
(b) enter into a 50:50 joint venture arrangement with the Vendors to govern the management of the AMP Capital Retirement Limited; and
(c) enter into a 50:50 joint venture arrangement with AMP Capital Investors (New Zealand) Limited which will manage, the 15 retirement villages and development sites throughout New Zealand, through a management company to be established. The proposed investment will provide AMP Capital Retirement Limited with the essential capital and experience it needs for future growth and efficiency”.
AMP Capital Retirement Limited operates Summerset Rest homes which has more than $200m in assets and is the third largest chain in New Zealand with plans to own 20 villages by 2011 (National Business Review, 20/4/09). AMP Capital paid $125m for Summerset in November 2005 (see February 2006 Decisions re this purchase). In August 2007, AMP planned to raise about $300m for 80% of Summerset via a sharemarket float, but ditched those plans after some analysts suggested the indicative share price was too high.
Quadrant has been previously active in New Zealand as part of a $275m leveraged buyout of outdoor clothing and equipment retailer Kathmandu in 2006 with Goldman Sachs JB Were (see April & October 2006 Decisions). Goldman Sachs was recently described by one journalist as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smelt like money”! (Rolling Stone, 13/7/09, “The Great American Bubble Machine“, by Matt Taibbi). Currently Quadrant is looking to exit its Kathmandu investment via an initial public offering (IPO) or share market float. Perhaps they don’t like being in partnership with a vampire squid?
Decision # 200821648
QPE Still Has More Money To Spend
A day after the above approval, QPE received a second approval, being Quadrant Private Equity Pty Limited as manager of Quadrant Private Equity No. 1 Australia (100%) acquisition of rights or interests in up to 67.2% of the redeemable preference shares and up to 68.5% of the ordinary shares of Seniors Money International Limited. The vendor was Existing Shareholders of Seniors Money International Limited other than Quadrant Private Equity Pty Limited New Zealand (67.74%), Australia (28.23%), Various (1.53%), United Kingdom (except Isle of Man and the Channel Islands) (1.38%), Kenya (1.12%). The value was stated as over $100m. The OIO states:
“The Applicant previously obtained the consent of the Overseas Investment Office on 27 June 2008 in respect of its acquisition of rights or interests in up to 65% of the shares in Seniors Money International Limited (SMIL). The acquisition was implemented immediately after the consent was granted resulting in the issue of $15.4 million (or 61.6% of the redeemable preference shares (RPS) in SMIL to the Applicant. At that time the Applicant also held (as it does now) 19.9% of the ordinary shares in SMIL.
“SMIL now proposes to issue up to $7.5 million of further RPS on the same terms and conditions as those applicable to the existing RPS issued by SMIL in June 2008. Following completion of the issue of the RPS by SMIL, under the Agreement, the Applicant will: own between 57.82% and 67.2% of the RPS in SMIL and 19.9% of the ordinary shares in SMIL; and have the right to convert each of the RPS (including the $15.4 million of RPS which it already holds) into ordinary shares which may result in the Applicant acquiring up to 68.5% of the ordinary shares of SMIL”. See June 2008 Decisions regarding Quadrant’s earlier foray into SMIL.
Decision # 200910012
Aussies Consolidate Their Ownership Of Our Health Food Industry As Well
Next Capital (Services A) PTY Limited as Trustee for the Next Capital Fund 1A, Next Capital (Services B) Pty Limited as trustee for the Next Capital Fund 1B and Next Capital Pty Limited as Trustee for the Next Capital Health Group Co-Investment Trust Australia (100%) was given approval to acquire rights or interests in 100% of the securities of Vitaco Health Group Limited, the value of the assets of Vitaco Health Group Limited and its 25% or more subsidiaries being greater than $100m. Consideration was in fact stated at $203,068,000. The vendor was Existing shareholders in Vitaco Health Group Limited other than Next Capital New Zealand (100%). The OIO states:
“The Applicants hold approximately 72.36% of the issued securities of Vitaco Health Group Limited (Vitaco). Vitaco is the holding company for two separate groups comprising Healtheries New Zealand Limited (Healtheries) and Nutra-Life Health & Fitness (NZ) Limited (Nutra-Life). Healtheries is a well established New Zealand business manufacturing an extensive range of health foods and supplements. Nutra-Life is a supplier of vitamins, minerals, herbs and other dietary supplements. The Applicants seek consent to acquire up to 100% of the issued securities of Vitaco to enable the Applicant to acquire further securities from other Vitaco security holders and to enable the injection of further equity capital should it be required from time to time”. See July 2006 and February 2009 Decisions for Next Capital’s entry into New Zealand’ s hire and rental car industries.
Decision # 200910065
Nuplex Risks Becoming An “Overseas Person”
Nuplex Industries Limited New Zealand (80.1%), Australia (15.1%), United States of America (2.1%), Hong Kong (Special Administrative Region) (1.6%), Various (1.1%) received approval to conduct a rights issue of shares of up to $138m. The OIO states: “Nuplex proposes to undertake a capital raising comprising of a renounceable pro-rata rights offer to its existing shareholders resident in Australia and New Zealand (Rights Issue).
“The rights issue will be fully underwritten by First NZ Capital New Zealand Limited. Currently, approximately 19.9% of Nuplex is owned by overseas persons. Therefore, Nuplex is not currently an overseas person for the purposes of the Act. After the allotment of the rights issue, Nuplex is likely to be held 25% or more by overseas persons although the exact percentage cannot be predicted. Best estimates available from First NZ Capital Limited suggest a maximum of 35% of Nuplex could be held by overseas persons following the allotment of the rights issue, making Nuplex an overseas person”.
Nuplex has been struggling on a number of fronts for at least the past year. Firstly, the resin and chemical maker suffered a significant drop in sales as the global economic crisis kicked in mid 2008. This led to a 25% drop in earnings and their banks becoming jittery, with one, Citibank, reluctant to roll over an $A50m debt facility. By February 2009, Nuplex’s own broker, First NZ Capital, began spreading speculation of a breach of its debt/earnings ratio covenant, resulting in a 25% fall in the share price and a “please explain?” from the Stock Exchange. Nuplex admitted the speculation was true. What followed was a classic example of “vampire squid” tactics. To quote Tim Hunter of the Sunday Star Times (23/3/09):
“Market sources say First NZ Capital’s move was a classic investment banking tactic to force Nuplex’s hand. With its share price tanking and its lenders playing hardball, Nuplex had to do something fast. The first effort proved to be a shambles. On March 16, First NZ Capital organised a placement and underwritten rights issue to raise $110m, but failed to reach a deal on price with big institutions and ‘habitual investors’, a term likely to include Rich Lister and hard-nosed investor Peter Masfen, owner of about 3.7% of Nuplex.
“Pressure mounted with the failure of the deal. Nuplex’s revised bank covenants were conditional on raising capital and the institutional investors smelled blood. Four days later Nuplex announced a seven-for-one pro rata rights issue to raise $132.8m. The discount to the share price was enormous. 577 million new shares would be issued at just 23c each. Before the profit warning in November (08) shares were above $5. The issue would obliterate the shareholding of anyone who didn’t take up their rights to buy new shares, but the effect on every shareholder was equal. If everyone took up their rights, no one would lose.
“The deal was also underwritten by First NZ which stood to buy any shares unsold, so Nuplex could be certain it would raise the full amount. First NZ’s fee for the underwrite was $2.6m. Analysts have since estimated Nuplex shares will be worth 38-40c after the rights issue, suggesting 23c a share is a bargain buy. ‘The stock offers investors compelling medium term value and recovery potential’, was one comment from Macquarie Equities analyst Lyall Taylor.
“That wasn’t enough for the big end of town. Knowing they had Nuplex by the short and curlies, the institutions insisted on securing extra for themselves through a ‘call option’. The call option gave a select group of ‘sub-underwriters’ the right to buy a further 99 million shares, 15% of the company at just 23c a share. A Stock Exchange waiver meant the normal requirement for a shareholder vote would be set aside. With post-rights shares likely to be worth at least 40c (net asset value per share would be twice that), the exclusive side deal effectively delivered tens of millions of dollars straight into the clutches of a handful of investors”.
The lesson for Nuplex? With friends like First NZ Capital, who needs enemies!
Decision # 200910055
Ripples From The AIG Debacle Hit Our Shores
Jill Considine, Chester Feldberg and Douglas Foshee as trustees of AIG Credit Facility Trust United States of America (100%) received approval to acquire rights or interests in 79.9% of the shares of American International Group Inc, the value of the assets of American International Group Inc and its 25% or more subsidiaries being greater than $100m. The vendor was Existing Shareholders in American International Group Inc. United States of America (91.01%), Switzerland (6.49%), Bermuda (2.32%), Various (0.18%) and the value was stated at $140,630,794. This $140m is a very small fraction of the US$180+ billion Uncle Sam has had to pump into this financial black hole. The OIO states:
“The AIG Credit Facility Trust was created pursuant to the AIG Credit Facility Trust Agreement (Trust Agreement) dated 16 January 2009 between Jill M Considine, Chester B. Feldberg and Douglas L Foshee (the Trustees) and the Federal Reserve Bank of New York (FRBNY). The AIG Credit Facility Trust has been created for the purpose of acquiring, holding and eventually disposing of the stock acquired. The AIG Credit Facility Trust will hold the stock for the sole benefit of the United States Treasury”.
AIG was possibly the highest profile casualty of the recent global financial crisis. Prior to the crisis, AIG was the world’s largest insurance company. In that role it essentially insured many of the worlds’ largest banks against losses in the nebulous world of financial derivatives (credit default swaps, collaterised debt obligations, etc). When these derivatives were eventually seen for what they were, aka “the emperor has no clothes”; AIG faced many massive payouts, which would have bankrupted it, if it wasn’t for the good ol’ US taxpayer mortgaging the next generation or three to bail them out.
AIG was the proverbial “Too Big to Fail” according to the US government, which may have been true, as its demise would almost certainly have brought the whole house of cards down. However it would be interesting to surmise what role the US Federal Reserve (the American Central Bank) played in this saga, as that institution is essentially controlled by the banks with which AIG dealt. Perhaps “dealt” is the wrong word, giving the impression of a high stakes game of poker. A closer analogy would be Russian roulette with the Federal Reserve (read banks) permanently holding the gun (fully loaded), pointed at the US taxpayer!
Here in New Zealand, AIG has recently changed the name of some of its insurance divisions to Chartis – the Greek word for map. Quite befitting, given the Greek tragedy that has befallen its parent company. Presumably the name change was partly to get away from the AIG name or perhaps as a precursor to an initial public offering or even sale. With the National government appearing to push ACC towards privatisation, the Council of Trade Unions has rightly questioned this, in light of the AIG collapse as well as recent history here. Specifically, a previous National government, privatised aspects of ACC, with HIH, one of the workplace cover providers, going bust! Despite the apparent deep pockets of Uncle Sam, do we really want Kiwis’ health and safety cover potentially in the hands of dodgy international financial alchemists?
Decision # 200910043
Global Financial Crisis Survivor Grabs Credit Rating Agency
Bank of America Corporation United States of America (89.529%), Various (10.471%) received approval to acquire property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, that property being 100% of the shares in VA (NZ) Holdings Limited (Veda NZ) through acquiring 100% of Merrill Lynch & Company Inc, including 100% of the shares in Veda NZ. The vendor was Merrill Lynch & Company Inc United States of America (85.5%), Singapore (9.02%), France (5.48%) Consideration was $265,764,000 The OIO states:
“On 1 January 2009 the Applicant, a US entity, and Merrill Lynch & Company, Inc. (Merrill Lynch), also a US entity, completed a merger under which a wholly-owned subsidiary of the Applicant, MER Merger Corporation, merged with and into Merrill Lynch (the Merger). Merrill Lynch now continues as the surviving company and subsidiary of the Applicant and is owned 100% by the Applicant. The Applicant acquired an interest in Veda NZ as a result of a much larger merger between the Applicant and Merrill Lynch.
“The Applicant sees acquiring Merrill Lynch as an opportunity for it to add to its position as a world leading financial institution. The Merger also makes the companies more valuable because of the synergies of the businesses. After the acquisition the Applicant is the world’s number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions. In relation to Veda NZ, the Applicant believes that Veda’s growth prospects are attractive, and that Veda is a sound investment for the funds managed by Merrill Lynch and now assumed by the Applicant. As a result of the Merger between the Applicant and Merrill Lynch, Veda NZ is now ultimately owned 50% by the Applicant and 50% by Pacific Equity Partners Fund III”.
MER Corporation is not to be confused with MERS (Mortgage Electronic Registration System) whose legitimacy in foreclosing on millions of distressed US homeowners is being seriously challenged in courts across America. Bank of America (BoA) is, of course, one of the titans in the US banking sector. It too was sinking fast in late 2008, until Uncle Sam gave it a helping hand in the form of billions of tax payer dollars. However contrary to the OIO’s suggestion, above, that the acquisition of Merrill Lynch (former employer of our own PM) was an opportunity; most believe it was forced on BoA as a condition of Government funding. This was because Merrill Lynch was every bit as sick as Lehman Bros (the investment bank that almost bought the global house of cards down). The US Administration knew that if Merrill Lynch collapsed like Lehmans, game over! The solution: absorb Merrill Lynch into something much larger and pump billions into it to keep it afloat, just.
Veda NZ is probably better known to readers by its former name Baycorp Advantage (name changed in November 2006). It is New Zealand’s largest provider of credit information, i.e. they will have a file on every one of us. Veda has been active recently, acquiring Secure Sentinel, entering a joint venture with EC Credit Control (Australasia’s largest privately owned debt collection agency) and suggesting to the Privacy Commissioner that more information be held on its files about us. See the commentaries on the September 2001 and May 2007 Decisions re the history of Veda and its former incarnation Baycorp. To echo Bill Rosenberg’s comments in 2007: “it is disconcerting to see Veda in the hands of a private equity corporation and an overseas bank. They create debt; Veda records it”.
Decision # 200910011
Origin Gets Approval Buy More Of Contact Energy
Origin Energy Limited Various (45.2%), Australia (43.64%), United States of America (6.71%), United Kingdom (except Isle of Man and the Channel Islands) (4.24%), New Zealand (0.21%) received approval for an overseas investment in sensitive land, being the acquisition of rights or interests in 100% of the Shares of Contact Energy Limited which owns or controls:
- a freehold interest in 35.7651 hectares of land at Ohaaki Rd, Broadlands, Reporoa; and
- a leasehold interest in 387.7900 hectares of land at Ohaaki Rd, Broadlands, Reporoa; and
- a freehold interest in 1135.4380 hectares of land at Sharpe Road & Otiriti Road, Pukekawa and Onewhero Road, Onewhero, South Auckland; and
- a freehold interest in 36.0000 hectares of land at 68A, 68C, 68D Bairds Road, Otara, Auckland; and
- a freehold interest in 13.4748 hectares of land at Poihipi Road; and
- a freehold interest in 929.6286 hectares of land at State HWY 1 Wairakei, Link Road, Rakanui Rd/Centennial Drive, Tauhara, Taupo; and
- a leasehold interest in 686.7147 hectares of land at State HWY 1 Wairakei, Link Road, Rakanui Road/Centennial Drive, Tauhara, Taupo; and
- a freehold interest in 65.3571 hectares of land at East Road, Stratford; and
- a freehold interest in 40.1775 hectares of land at Lake Hawea; and
- a freehold interest in 4462.4034 hectares of land at East Ferry Street, Stonewall Street, Rongahere Road, Millers Flat, Eastbridge Street, SH 8, Raes Junction, Tuapeka; and
- a freehold interest in 2467.7180 hectares of land at Clutha River, Lake Dunstan, SH 8 Cromwell Gorge, Springvale Road, Clyde, Alexandra, Manuherikia Road SH 85; and
- a freehold interest in 63.5043 hectares of land at Clutha River, within the Roxburgh Power Station site; and
- a freehold interest in 1553.4946 hectares of land at Queensbury and Luggate; and
- a freehold interest in 19.3490 hectares of land at Breakwater Road, New Plymouth.
Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in 100% of the shares of Contact Energy Limited, the value of the assets of Contact Energy Limited and its 25% or more subsidiaries being greater than $100m. That was somewhat of an understatement as the value was stated at $5,203,200,000! The vendors are Existing Shareholders in Contact Energy Other than Origin Energy Limited New Zealand (85.05%), United States of America (6.64%), Various (3.06%), United Kingdom (except Isle of Man and the Channel Islands) (2.75%), Australia (2.5%). The OIO states:
“Contact has developed a form of dividend reinvestment plan (“Plan”), in the form of a profit distribution plan. The Plan offers the opportunity to reduce Contact’s exposure to debt markets by increasing equity participation by existing shareholders as a substitute for ordinary cash dividends. As a Contact shareholder, Origin (through its subsidiaries) wishes to participate in the Plan. Full participation by Origin in the Plan is expected to result in an increase in Origin’s existing shareholding in Contact”.
Contact is listed on the New Zealand Stock Exchange and is the largest wholesaler and retailer of natural gas and one of the largest generators and retailers of electricity in New Zealand. Contact generates approximately 30% of New Zealand’s electricity through its ten power stations located in New Zealand. For more on Contact Energy, see “Electricity reforms and Contact Energy Ltd“, by Sue Newberry and Bill Rosenberg, in Watchdog 108, April 2005.)
Origin’s original takeover of Contact was in July 2004, but Overseas Investment Commission (OIC) approval was apparently overlooked by both the company and the OIC until CAFCA asked the OIC whether it had given its approval. The August 2005 approval was therefore a retrospective approval, indicating just how perished is the OIC’s rubber stamp. The takeover was therefore illegal for some months (for more details of this incident see “First Ever Conviction of Foreign Landowner: Huge TNC Transgressions Go Untouched“, by Murray Horton, Watchdog 110, December 2005.)
And, of course, Contact Energy has unfortunately been a frequent finalist in the Roger Award (for details of why Contact was a Roger Award finalist, again, in 2008, see the Judges’ Statement.)
Decision # 200910001
Ownership Of Satellite Communications Facility Changes Hands
Inmarsat Finance III Limited United Kingdom (except Isle of Man and the Channel Islands) (46.2%), United States of America (30.1%), Various (22.6%), Russia (1.1%) received consent for an overseas investment in sensitive land, being the acquisition of rights or interests in 100% of the shares of CIP UK Holdings Limited which owns or controls a freehold interest in 1.1645 hectares of land at 24 Unity Drive, North Albany. Consideration was $7,200,000. The vendor was Existing Shareholders in CIP UK Holdings Limited Netherlands (60%), France (20%), Spain (20%). Inmarsat is a provider of global mobile satellite communications services, providing data and voice connectivity to end-users worldwide for use on land, at sea and in the air. The OIO states:
“The Applicant is seeking to enter into a transaction whereby it will acquire beneficial ownership of 100% of the shares in CIP UK Holdings Limited (CIP UK), a company incorporated in Great Britain under the law of England and Wales (Transaction). CIP UK owns 100% of the shares in CIP Canada Investment Inc (CIP Canada), which owns 100% of the shares in Stratos Global Corporation (Stratos). Stratos provides satellite services and terrestrial communications solutions to more than 20,000 customers on seven continents and across the world’s oceans. Stratos end users include government, military, oil and gas, maritime, industrial, aeronautical, media and recreational users across the globe.
“The New Zealand component of the proposed Transaction is part of a much wider international transaction. An overseas company will indirectly gain control the Stratos’ New Zealand subsidiaries of the business. Acquiring Stratos will better position the Inmarsat group of companies to compete effectively in the global commercial mobile satellite communications services industry. It will also enable Inmarsat to provide service to end-users directly through Stratos as well as through third party distributors, rather than just distributing solely through ‘middlemen’. The Inmarsat group of companies will then be able to use the same type of direct and indirect distribution avenues that are enjoyed by its satellite operator competitors and by other communications companies, enhancing Inmarsat’s ability to serve the needs of its customers”. See our commentaries of November 2000 and July 2007 regarding the change of ownership (overseas) of this strategic site.
Decision # 200821668
Capital Raising Needed For Former Carter Holt Harvey Forests
Hancock Natural Resource Group Inc as Manager for various associated investment funds Canada (55%), United States of America (35%), Various (10%) received approval to purchase rights or interests in further shares and other securities in Taumata Plantations Limited which owns or controls:
- a freehold interest in 36880.6442 hectares of land in the Northland Region; and
- a leasehold interest in 24271.8409 hectares of land in the Northland Region; and
- a leasehold interest in 21116.3239 hectares of land in the Waikato Region; and
- a freehold interest in 118292.5776 hectares of land in the Waikato Region; and
- a leasehold interest in 18157.7312 hectares of land in the Bay of Plenty Region; and
- a freehold interest in 681.4644 hectares of land in the Bay of Plenty Region; and
- a leasehold interest in 7.3120 hectares of land in the Nelson Region; and
- a freehold interest in 21049.8043 hectares of land in the Nelson Region
The approval is also for an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in further shares and other securities of Taumata Plantations Limited. The vendor was Existing Shareholders in Taumata Plantations Limited Canada (35.3%) United States of America (25.5%), Australia (23.9%), Norway (15.3%). Consideration was to be advised. The OIO states:
“In October 2006 consent was granted to the Applicant to acquire certain of the Carter Holt Harvey (CHH) forest estates and to various associates of the Applicant acquiring 100% of the securities in Taumata Plantations Limited (“Taumata”), which was the company established by the Applicant to make the acquisition of certain of the CHH Forest Estates. Taumata Plantations Limited is currently in the process of seeking to raise new capital by the issue of further securities to investors. The proposed investors in the capital raising will be “associates” (as defined in the Overseas Investment Act 2005 (“Act”)”.
Hancock’s original purchase of these forests is documented in detail by Bill Rosenberg in the October 2006 Decisions. The significance of Hancock’s purchase was recently highlighted in the Waikato Times (3/8/09) titled “Overseas investors buy up in Waikato”. This article pointed out the rather disturbing fact that nearly 5% of the Waikato has been sold to foreign investors in just the past four years!
Decision # 200910015
Weiti Forest Park Beachfront Soon To Be Gated?
Weiti No. 1 Partnership New Zealand (50.35%), Australia (43.65%), United Kingdom (except Isle of Man and the Channel Islands) (6%) received approval for the acquisition of:
- a freehold interest in 862.6433 hectares of land at 1696 East Coast Road, Rodney District, North Auckland; and
- a freehold interest in 1.6996 hectares of land at 2 Duck Creek Road, Stillwater.
- And overseas investment in significant business assets, being the Applicant’s acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m.
Vendors were Green & McCahill Holdings Limited – (East Coast Road property) Taiwan (100%) and Williams Land Stillwater Limited – (Duck Creek Road property) New Zealand (100%). Consideration was $163,421,000. Not a bad return on the $2m that Green & McCahill paid for the land in 1993! According to the National Business Review (6/5/09), Weiti No 1 is headed by developer Evan Williams who has been proposing a “high end gated community” residential development on the site for several years. Fortunately, the Auckland Regional Council has knocked the development back in order to protect the adjacent Okura estuary, seeing the original plans for 1500 homes cut back to just 150. And now after overcoming the environmental barriers it appears the economic climate may delay it further. The OIO states:
“Purchasing the land will allow the Applicant to develop the land by providing between 150 and 350 residential lots, with the objective of providing a commercial return to the Applicant’s investors. The residential lots will be developed on no more than 220 hectares of the land, leaving at least 500 hectares as a permanent green belt on the northern fringes of Auckland”. Well it is comforting that they will be retaining a green belt, but the residential lots will be well out of the price range of the average Kiwi.
Decision # 200810051
Wiroa Station Sold
Waterfront Fund New Zealand (61%), Australia (31%), United Kingdom (except Isle of Man and the Channel Islands) (8%) received approval to acquire a freehold interest in 508.4679 hectares of land at Purerua Road, RD1, Kerikeri, Bay of Islands. The vendor was Williams Capital Holdings No.1 Limited New Zealand (100%), consideration was $30,200,000. This is another development headed by Mr Evan Williams, mentioned in the previous Decision. The OIO states: “Purchasing the land will allow the Applicant to develop the land known as Wiroa Station by providing 25 lifestyle blocks and increasing the productivity of the existing farm business, with the objective of providing a commercial return to the Applicant’s investors”.
Decision # 200720048
Irish Keen On Dairying Prospects In Southland
It appears Southland has more going for it than the Ranfurly Shield and cheap power for its most infamous resident Rio Tinto Aluminium NZ Ltd (better known by its former name, Comalco). Premier Dairies Limited Ireland (100%) received three separate approvals in March for land purchases there. These include:
- the acquisition of a freehold interest in 5.5695 hectares of land at 93 North Makarewa School Road, Southland, (vendor David John Lumsden New Zealand [100%] consideration $350,000),
- the acquisition of a freehold interest in 100.8245 hectares of land at 875 North Makarewa-Grove Bush Road, Southland, (vendor Willow Bend Company Limited New Zealand [100%] consideration $3.375, 000), and
- the acquisition of a freehold interest in 47.2766 hectares of land at 1275 Lorneville-Dacre Road, Southland (vendor Brendan James and Barbara Anne Fahy New Zealand [100%] consideration $1,968,750).
The OIO states:
“The Applicant proposes to acquire the relevant land which adjoins land used for dairy farming by the Applicant. The land will be acquired to provide additional land for the Applicant’s dairy farm plus essential extra housing. The acquisition of the land, which is in close proximity to other properties owned by the Applicant, is part of the Applicant’s strategy to become self reliant for supplementary feed production and dairy support stock grazing. Given the size of the Applicant’s dairying operation, it needs a reliable supply of good quality supplement at a sustainable price. The Applicant intends to acquire the land and other properties to provide a reliable and sustainable platform from which to produce the required supplements”.
According to the Agridata Blog (4/5/09), Premier Dairies is owned by the Clinton family of Ireland and has completed an almost $20 million buy-up of Southland farms in the past six months. From 2000 to 2002 they bought several properties near Winton, converting them to dairying. For more information, refer to OIC Decisions written up for December 2000, May/June 2001, February 2002, and September 2008. Clearly the Clintons want to become a major player in the NZ dairy industry. Let’s pray they don’t follow in the footsteps of the Crafars up north (Alan Crafar, with more than 20 farms across the North Island, went spectacularly broke in 2009, in debt to the tune of $200 million. He had become nationally notorious for a string of convictions leading to the media and public personifying him as “dirty dairying”. Ed.).
Decision #s 200821605/25/26
Fosters Keen On NZ Vineyards
Fosters New Zealand (Matua) Limited Australia (37%), Various (35%), United States of America (15%), United Kingdom (except Isle of Man and the Channel Islands) (13%) has received two separate approvals to buy vineyards here, namely:
- the acquisition of a freehold interest in 39.8476 hectares of land at Redwood Pass Road, Awatere Valley, Marlborough (vendor Duelling Banjos Limited New Zealand [100%] consideration stated as confidential), and
- the acquisition of a freehold interest in 52.2942 hectares of land at Redwood Pass Road, Awatere Valley, Marlborough (vendor Donald Stuart Mitchell and Helen Elizabeth Mitchell as trustees of the DS and HE Mitchell Trust New Zealand [100%] consideration also stated as confidential). The OIO states as background to both decisions, that: “The vineyard is being acquired to give the Applicant a more reliable supply of grapes”. See Decisions in February/April 2001 (Matua) and January/March/June 2002 re other Kiwi vineyards that Fosters has taken an interest in.
Decision # 200821659
Other March Decisions
Woollaston Estates Holdings Limited United States of America (79.84%), New Zealand (20.16%) received approval to acquire a freehold interest in 19.6040 hectares of land at the corner of Dominion Road and Old Coach Road, Mahana, Tasman. The vendor was Phillip Tosswill Edmond Woollaston New Zealand (100%). Consideration was $787,500.
Decision # 200910001
David Anthony and Jennifer Susan Pirotta United Kingdom (except Isle of Man and the Channel Islands) (100%) received approval to acquire a freehold interest in 5.1700 hectares of land at 16 Signallers Grove, Wellington. The vendor was Lindsay Anthony de Bes and Maxine Bianca de Bes New Zealand (100%), consideration was $915,000. The OIO states: “The Applicants are married and intend to live in New Zealand permanently. Mr Pirotta intends to obtain permanent employment as specialist anaesthetist with the Capital and Coast District Health Board. The property will become the Pirottas’ new family home”.
Decision # 200910010
Evan Bouw & Katja Waardenburg Netherlands (100%) received approval to acquire a freehold interest in 9.8320 hectares of land at 348 Rea Road, Katikati. The Applicants are nationals of the Netherlands and are currently residing in Omokoroa, New Zealand. They are seeking to reside in New Zealand indefinitely. The vendors were Alan John Hay and the Estate of Kristin Margaret Morton New Zealand (100%), consideration was $943,750. The OIO states:
“The Applicants have been granted an interim (nine month) New Zealand Long Term Business Visas/Permits to operate a sandwich bar in Tauranga. The vendor used the property as a lifestyle property. There is an organic avocado orchard on the property which was already established when the Vendor purchased the property. The Applicants wish to purchase the property as a lifestyle block but also operate some business activities from the avocado orchard which currently constitutes two hectares of the land which is intended to be increased to four hectares. The Applicants have the intention to become New Zealand residents”.
Decision # 200821658
Summary Statistics March 2009
All investments
| March 2009 | Jan-Mar 2009 | Jan-Mar 2008 | |
|---|---|---|---|
| Number of approvals | 20 | 42 | 28 |
| Net Investment $ | (17,688,314) | 48,577,105 | 136,599,827 |
| Gross value of consideration | 693,358,754 | 1,779,615,940 | 2,272,426,924 |
| Asset Value | Confidential | 9,369,365,858 | N/A |
Freehold land approved for sale
| March 2009 | Jan-Mar 2009 | Jan-Mar 2008 | |
|---|---|---|---|
| Number of approvals | 16 | 37 | 22 |
| Net land area (ha) | 9,247 | 11,204 | 1,131 |
| Gross land area (ha) | 193,040 | 195,863 | 5,386 |
Other interests in land approved for sale (for example leases and crown pastoral leases)
| March 2009 | Jan-Mar 2009 | Jan-Mar 2008 | |
|---|---|---|---|
| Number of approvals | 3 | 8 | 6 |
| Net land area (ha) | 914 | 916 | 84 |
| Gross land area (ha) | 64,631 | 90,611 | 10,213 |
Fishing Quota
As usual there was no fishing quota approved for sale this month.
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.