Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – November 2011 Decisions

A busy month at the OIO, with a number of approvals involving port properties around the country. First up however is the public offering of up to a third of iconic Kiwi start up company Trade Me.

Fairfax Takes Literal Approach To Trade Me Investment

With the digital threat to the global print media growing by the day, Fairfax Media has decided to sell down its interest in one of its most prized assets, Trade Me. In two separate but related decisions, Fairfax New Zealand Holdings Limited Fairfax Media Limited, Australia (100%) received approval to restructure its holding in Trade Me NZ Ltd in order to prepare it for partial public flotation. In the first decision Fairfax received approval for the acquisition of rights or interests in up to 70% of the shares of Trade Me Group Limited, the value of the assets of Trade Me Group Limited and its 25% or more subsidiaries being greater than $100m.

The OIO states: “In 2006, the Applicant acquired 100% of the ordinary shares in Trade Me Limited. It is now proposed that 30-34% of the shares in the Applicant’s subsidiary, Trade Me Group Limited, will be offered to the public through an initial public offering (IPO). As one of the steps in structuring the IPO, it is proposed that the Applicant will transfer the shares in Trade Me Limited to Trade Me Group Limited and contemporaneously acquire 66-70% of Trade Me Group Limited’s shares via an allotment under the IPO”.

In the second decision, Trade Me Group Limited Fairfax Media Limited, Australia (70%) Persons who may be overseas persons, various (30%) received approval to acquire rights or interests in 100% of the shares of Trade Me Limited, the value of the assets of Trade Me Limited and its 25% or more subsidiaries being greater than $100m. Consideration was not stated. Trade Me is of course New Zealand’s most successful Website. Founded in 1999 by Sam Morgan, son of well known economist/commentator Gareth Morgan, it quickly established itself as New Zealand’s most popular Website, accounting for more than half of all New Zealand’s Internet traffic. In 2006 the private owners of Trade Me sold the company to Fairfax media for $700 million. See our March 2006 commentary for further details of Fairfax’s purchase of Trade Me.

Stuff.co.nz reported on the impending sell-down by Fairfax on 26 August 2011 under the heading: “Fairfax Media to sell slice of Trade Me”. “…Trade Me would be a public, stand-alone company listed on the NZX and chaired by former Fairfax Chief Executive Officer (CEO) David Kirk. He says the move will free up Trade Me to access the expansion capital the business needs and that it was now big enough to warrant a separate listing… Kirk says the timing is right for the media company to sell part of its Kiwi auction website Trade Me. ”It will free Trade Me to access external capital as the business is now large enough to warrant a separate listing and for Fairfax itself, it will retain access to the majority of the business and therefore earnings that come from that’. Kirk has been appointed non-executive Chairman of the Trade Me Board and company founder Sam Morgan, who’s also currently on the Fairfax Media Board, will be a director of the spin off. Kirk says he thinks it will be helpful to have Morgan on the Board. ‘Sam knows the business very well and has a broad understanding of Internet and other technology businesses. That’s all going to be very important going forward’.

“No value was placed on the potential float by Fairfax Media but analysts earlier in 2011 had views on that. Analyst Fraser McLeish of Royal Bank of Scotland, who sparked speculation in April about a potential part-sale by issuing a report suggesting Fairfax float half of Trade Me through an IPO, said at the time that the move would boost the trans-Tasman group’s share price. His advice was based on a calculation in which a 50% stake in Trade Me would raise up to $A600 million, with the proceeds helping Fairfax fund a 10% share buyback, reduce net debt by $A290m, and $A1.2 billion and pay a higher dividend.

“Kirk, who was responsible for the purchase at the time, now says he had no forethought then of publicly floating any of it at some future date. ‘I bought it because I felt it was a fantastic business which would continue to grow and do well and would work within the Fairfax portfolio. Given it was clear that classified advertising would suffer long-term and was in decline it was also clear that Trade Me might look to pick up some of that business. It was not only an opportunity to grow Fairfax but also an opportunity to defend the loss of those classifieds’.’

“In Fairfax’s full year results to June 2011, it shows Trade Me revenue was up 11.5%. Earnings before interest, taxes, depreciation, and amortisation increased by 9.4 % to $99.2m. Fairfax’s General Manager for Investor Relations Frank Sufferini said because of the strict securities law there wasn’t much he could add to the company’s statement before a prospectus was issued. ‘It’s [the statement] as far as we can go’. Fairfax would now ‘get the business ready’ for the initial public offering, Sufferini said.

“Once that had occurred, and ‘it was the right time’, Fairfax would issue a prospectus. At that stage the company would be able to say more, Sufferini said. Analysts have valued Trade Me at $1.3 billion to $2 billion. It has 2.7 million registered traders and employs 190 staff in New Zealand. Since Fairfax Media bought Trade Me for $700 million in 2006, under the leadership of Kirk, it has been the trans-Tasman company’s star performer. While the company does not split out Trade Me specifically, the auction site makes up the majority of the 17% of earnings contributed by the ‘online’ sector to the Fairfax pie.

“Original Trade Me investor Phil McCaw says Fairfax’s announcement of an initial public offering of up to 35% of the auction site is ‘fantastic for New Zealand’. McCaw, who is now heavily involved in angel investing and is a founding partner of investment manager Movac, has an estimated fortune of $95 million thanks in large part to his former stake in Trade Me. He said today that any float of Trade Me would be a ‘great opportunity for New Zealand to invest in a great company’. When asked if he would re-invest in the site he said ‘it’s tempting, isn’t it’. McCaw wouldn’t speculate on any potential share price and said he would ‘leave further comment to someone else’. Fellow Trade Me original investors Richard Abbott, Mark Richter, Sharon Weaver and Ian Miller are also investors in Movac.

“Key Trade Me statistics:

2.8 million registered members
one million members logged in over the past month (i.e. prior to this August 2011 article. – Ed)
In 2010, more than one million people bought or sold something on Trade Me
1.7+ million concurrent listings. Around half of listings are brand new
8.5+ million unique browsers per month
2.5 million e-mails sent per day
700,000 + visitors each day (according to Nielsen Online)
25,000 message board posts daily

The Websites:

Trade Me – core marketplace for online auctions and classifieds
Trade Me Motors – vehicle auctions and classifieds
Trade Me Property – real estate classifieds, for sale and for rent
Trade Me Jobs – employment classifieds
FindSomeone – Online dating
Travelbug – hotel and motel booking
BookIt – Travel and tourism booking engine
Holiday Houses – holiday home rentals
Old Friends – school and workplace networking”.

Fairfax eventually sold a 34% stake at $NZ2.70 a share, raising $NZ529.5 million from the sale, (including $NZ166 million of debt loaded onto Trade Me’s balance sheet).The above sell down of one third of Trade Me was, as it turned out, not going to stop there, given the current challenges facing Fairfax. In June 2012 Fairfax sold another 15% in an effort to shore up its weak balance sheet. Details of this further sell down were reported by the New Zealand Herald on June 19 under the heading “Trade Me a valuable asset for Fairfax media in troubled times”.

“Once dismissed by Australian market analysts as an expensive purchase for Fairfax Media, Trade Me has emerged as valuable currency in troubled times. Fairfax is selling 15% of one of its most successful assets – on top of the 34% floated at the end of 2011 – to offset problems in its publishing business. The divestment, sold off-market to selected investors at the weekend, leaves Fairfax with a 51% stake in the online auction company which it says it has no plans to sell.

“Mum and dad investors who bought into Trade Me at the end of 2011 were not told explicitly of the sell-down just six months after the float. Market players who took part in the December 2011 float had expected a further sell-down, but said that initially they had expected it to be in another month. The latest sell-down is not expected to have a big impact on the way Trade Me is run. Three of its five directors are appointed by Fairfax, and that is not expected to change. But Trade Me Chief Executive Jon Macdonald said that the initial 34% float distanced the company from Fairfax and meant it related to the rest of the market more independently. Former Fairfax Chief Executive David Kirk – now Chairman of Trade Me – drew a mixed reaction when he bought Trade Me for $A700 million in 2006, but the float of 34% of the company in 2011 raised $A364 million. The latest 15% raised $A160 million, a total of $524 million for selling 49% of the firm.

“Meanwhile, Fairfax, which takes one-third of its non-Trade Me revenue from New Zealand, announced a big restructuring of its Australian assets owing to the growing shift of advertisers to digital media. However, Fairfax insists that the major upheavals across the Tasman will not happen here, because readers’ switch to digital has been slower here. Fairfax New Zealand Chief Executive Allen Williams said there were no plans for job cuts in New Zealand. The main effects of the restructuring, which will mean the loss of 1,900 jobs over three years, were on metropolitan newspapers such as the Age in Melbourne and the Sydney Morning Herald. Williams said Fairfax was proceeding with regionalisation of the Sunday Star-Times newspaper after July 1.”

And it is not just the digital threat that is giving Fairfax directors some sleepless nights. Mining magnate Gina Rinehart has quickly grabbed a 20% stake in the company and has sought two seats on the board, while the company’s Aussie journalists are not happy that many of their jobs will be outsourced to New Zealand. Given the growing threat of digital media to this sector, it seems a little ironic that Fairfax would sell down its stake it what is by far New Zealand’s largest digital asset, Trade Me.

Goodman Takes Control Of Viaduct Harbour Properties

Goodman Nominee (NZ) Limited as nominee of the Goodman Property Trust New Zealand Public (72.5%), Australian Public (22.8%), North American Public (3.7%), Asian Public (0.6%), United Kingdom Public (0.3%) and European Public (0.1%) received approval for the acquisition of rights or interests in the remaining 50% of the shares of Viaduct Corporate Centre Limited, the value of the assets of Viaduct Corporate Centre Limited and its 25% or more subsidiaries being greater than $100m. The vendor was Balfour Trust and Eamon Trust New Zealand (100%): the asset value was stated as $155,000,000.

The OIO states: “The Applicant currently owns 50% of the shares in Viaduct Corporate Centre Limited (Viaduct). The Applicant proposes to acquire the remaining 50% of the shares in Viaduct. Viaduct’s primary activity is the ownership and management of its Auckland Viaduct Harbour properties and ancillary activities. The Applicant considers the transaction to be consistent with the Applicant’s business strategy of owning good quality commercial office and industrial property in New Zealand”. See our March 2006 commentary for details of Goodman’s original purchase of a 50% stake in these properties.

Retrospective Consent Given To Antipodean Port Operator

In four separate decisions Marstel Terminals Limited Marstel Holdings Limited New Zealand (50%), State Authorities Superannuation Trustee Corporation, Australia (45%) and Oleate Pty Limited, Australia (5%) received retrospective approval to acquire a leasehold interest in three parcels of port land, one in Bluff and two in Auckland. Firstly, a leasehold interest in 0.6 hectares of land at Bluff. The lease value was $1,123,049; the vendor was South Port New Zealand Limited Southland Regional Council, New Zealand (75.4%) and New Zealand Public (24.6%). In this decision the OIO states: “The acquisition in February 2009 of the leasehold interest of the land at Bluff land gave the Applicant a presence in Southland which enabled it to service the rapidly expanding dairy industry in the region. The Applicant has now sought retrospective consent for the acquisition”.

Secondly, a leasehold interest in 1.2 hectares of land at Gabador Place, East Tamaki, Auckland. The lease value was $2,334,180; the vendor was Ports of Auckland Limited New Zealand (100%). The OIO states: “The acquisition in July 2007 of the leasehold interest in the land at Gabador Place allowed the Applicant to support the Wynyard Quarter redevelopment and in agreement with Ports of Auckland Limited (POAL) work together to achieve the eventual relocation of the Applicant’s Hamer Street terminal. The Applicant has now sought retrospective consent for the acquisition”.

Thirdly, a leasehold interest in 2.5 hectares of land at the corner of Brigham and Hamer Streets Freemans Bay Auckland. The lease value was $15,977,078; the vendor was Auckland Waterfront Development Agency New Zealand (100%). The OIO states: “The acquisition in June 2010 of the leasehold interest in the Wynyard Point terminal allowed the Applicant to integrate the terminal with its nearby Hamer Street bulk chemical storage facility, providing economies of scale, efficiency benefits, and the ability to relocate products between the terminals to lower the chemical risk at the terminals. The Applicant has now sought retrospective consent for that acquisition”.

Fourthly, a leasehold interest in 1.2 hectares of land at Gabador Place, East Tamaki, Auckland. The leasehold value was to be advised; the vendor was Ports of Auckland Limited New Zealand (100%). The OIO states: “To support the Wynyard Quarter redevelopment and in agreement with Ports of Auckland Limited (POAL) that the parties would work together to achieve the eventual relocation of the Applicant’s Hamer Street terminal the Applicant entered into an agreement to lease the land in 2005 from POAL. POAL is currently seeking a boundary adjustment of the land to make the site more efficient for the future expansion of the terminal facilities. The Applicant is therefore seeking consent for the acquisition of the restated leasehold interest in the Gabador adjusted area”. The Marstel group operates a bulk liquid handling and storage business including hazardous and non-hazardous chemicals, edible oils and petroleum products in New Zealand and Australia. See our May 2002 commentary for details of Marstel’s original interest in Gabador Place, Auckland.

And Part Of Timaru’s Wharf Goes To The Swiss

Holcim (New Zealand) Limited Swiss Public (23%), Capital Group Limited, United States of America (21%), Various overseas persons (21%), Schmidheiny (Thomas), Switzerland (18%), United States Public (10%) and Eurocement Holding AG, Switzerland (7%) received approval for the acquisition of a leasehold interest in 2.3 hectares of land at Evans Bay, Timaru. The leasehold value was stated as confidential; the vendor was PrimePort Timaru Limited Timaru District Council, New Zealand (71%) and Port Industry Holdings Limited, New Zealand (29%).

The OIO states: “The Applicant’s investment in the Port of Timaru by way of the lease and associated wharf and cement/clinker storage facility development is a critical part of the Applicant’s potential development of a new cement plant at Weston, North Otago”. Holcim is the world’s second biggest cement maker, and over the past few years has been actively buying up land in Weston, North Otago in anticipation of establishing a cement works there. See our commentaries for December 2003, March 2004, September and October 2005, December 2006, December 2007, January and June 2008, January 2009 and February 2009 for details of this other land purchases here by Holcim.

Swiss Buys 8,500 Hectares On East Cape

In two separate decisions Monte Forestry Limited Christian Welte, Switzerland (100%) has received approval for:

an acquisition of a freehold interest in 5,022.5 hectares of land and approximately 1,480 hectares of leasehold/licence land at Waikura/Pakira Stations located at 1904 Waikura Road, East Cape, and
an overseas investment in sensitive land, being the Applicant’s acquisition of a freehold interest in 1,926.6 hectares of land (and approximately 55 hectares of leasehold/licence land) at Rewhetu Station located at Waikura Valley Road, East Cape.

The vendor for the first transaction was The Ingleby NZ Limited Partnership The Ingleby Trust, United Kingdom (100%); consideration was $16,250,000. The vendor for the second transaction was Rewetu Station Limited New Zealand (100%); consideration was $5,000.000. The OIO states with respect to both approvals: “The Applicant is combining three adjoining farms into a single forestry and sheep/beef farming operation. The area of forestry on the relevant land will increase in accordance with the objectives of the East Coast Forestry Project which aims to control excessive erosion in the Gisborne Area”. Marianne Gillingham reported further details of this significant forestry purchase in the Gisborne Herald (10/1/12).

“A Gisborne rural real estate agent ended 2011 on a high with the Overseas Investment Office approving the sale of three East Coast stations to a Swiss family for a total of $21.25 million. Waikura and Pakira stations – totalling 5,022ha of freehold and 1,480ha of leasehold and licensed land – were sold for $16.25m by the Ingleby Trust to Monte Forestry Ltd. It is a New Zealand-registered company 100% owned by Christian Welte of Switzerland.

The company also bought nearby Rewhetu Station (1,926ha), also in the Waikura Valley, for $5m.These were exceptional prices, said sales agent Warwick Searle of L.J Hooker.

Mr Welte has a background in bio-engineering, winning a major Swiss environmental award in 2008 for a biomass energy plant he helped develop in Germany. According to the Overseas Investment Office, he wants to develop long-term investments in natural resources outside Europe and has already bought two forestry blocks, totalling 2,061 ha, of forestry in Waiotahi near Opotiki. In the Waikura Valley, he wants to combine the three adjoining farms into a single forestry and sheep/beef farming operation. New areas of forestry will be planted on erosion prone and steep land to meet East Coast Forestry Project and the Council’s Overlay 3A erosion control aims.

“The family planned to plant 700 ha over the coming year but wanted to retain pasture on the majority of the land, said Mr Searle. They planned to spend a month or two on the farms each year, and had already had a great time horse riding and exploring the properties over summer. The Ingleby Trust, meanwhile, still retains significant land holdings on the East Coast but wants to spread its climate risks further by having some of its New Zealand farms in the King Country. Ingleby is a privately owned company based in Denmark, which has farming investments in Argentina, Australia, New Zealand, Uruguay, Romania and the United States.

“Since coming to New Zealand in 1999 the Ingleby Trust, owned by members of the Rausling family, has bought about 17 farms, some of which have been amalgamated. The family and their company have a strong commitment to environmental sustainability. In New Zealand, they have entered an agreement with the Tindall Foundation which uses the Ingleby Farms as a working model to promote sustainable land use. Remaining Ingleby land holdings on the East Coast include Katoa at Te Araroa and Matahiia at Ruatoria.

Overseas interest in New Zealand farming and forestry continues to stimulate the rural market. As well as farming, demand for less productive land for forestry remains strong.

Earlier in 2011 LJ Hookers Gisborne office sold Makiri Station, Bremner Station and Waihora Station to forestry interests, with a 200ha block near Te Karaka sold to the Roger Dickie forestry investment company. Likewise, Bayleys has fielded some strong demand for marginal land, with Mangawehi Station also going to Roger Dickie and the agency earlier selling two Tolaga Bay farms to forestry companies. They were also fielding strong demand for pastoral farms, said Patrick Willock of Bayleys”. See our commentary in February 2011 for details of Christian Welte’s purchase of 2061 hectares in Opotiki.

Waiheke Island Airfield Now English-Owned

Waiheke Island Airpark Resort Limited as Trustee of the Neil Greer Developments Trust Neil Hardy Greer, United Kingdom (100%) has received approval for the acquisition of a freehold interest in nine hectares of land at 171 Carsons Road, Waiheke Island. The vendors for the Otautau property were Terraces Dairy Limited Australian Public (91.7%), New Zealand Public (4.3%), various overseas persons (4%); consideration was $6,500,000. The vendor was Waiheke Air Services (2002) Limited Denis Brian Musson, New Zealand (100%); consideration was $2,643,750.

The OIO states: “The land comprises the Waiheke Island airfield, which is the only airfield on Waiheke Island that is available for commercial and private operations. As well as providing for commercial airline activities, it is also used by emergency services to service the greater Hauraki Gulf environment, while at the same time providing recreational tourism facilities. The Applicant proposes to maintain and improve the airfield operations as a viable, commercial airfield facility to service the greater Hauraki Gulf area and Auckland. The Applicant also proposes to further develop the airfield by sealing the runway, constructing hangars, airfield facilities and 26 visitor accommodation units (as approved by an existing Resource Consent)”.

Powerco Gets Retrospective Consent For Two North Island Properties

In two separate decisions Powerco Limited QIC Limited, Australia (58%) and Prime Infrastructure Group, Australia (42%), owned by Brookfield Infrastructure Group, US received approval to acquire:

a freehold interest in 46.7 hectares of land at 157 Kaimarama Road, Whitianga for $405,000 from Ian Noel Meredith & Dorothy Elizabeth Meredith New Zealand (100%), and
a freehold interest in 13.4 hectares of land at 661 Kopu-Hikau Road, Kopu for $492,000 from Justine Singing Moon New Zealand (100%)

With respect to the first property, the OIO states: “The Applicant seeks retrospective consent for the acquisition of land used for the establishment of a new electricity line between Coroglen switching station and Kaimarama”. For the second property, the OIO states: “The Applicant seeks retrospective consent for the acquisition of land used for the establishment of a new electricity line between the Kopu Grid Exit Point and the Kauaeranga Valley”. See our November 2009 commentary for details of Brookfield’s initial purchase of 39.9% of Prime from Babcock and Brown, and our October 2004 commentary for details of Babcock and Browns original purchase of Powerco. In February 2009, Babcock sold a 58% share in Powerco to Queensland Investment Corporation (QIC) Private Capital Pty Limited. In November 2010 Brookfield increased its shareholding in Prime to 100%.

Repco Now American-Owned

Genuine Parts Company United States of America (100%) has received approval to acquire the rights or interests in 100% of the shares of Exego Group Pty Limited (through an initial acquisition of 30% and an exercise of a call option for the balance of 70%), the value of the assets of Exego Group Pty Limited and its 25% or more subsidiaries being greater than $100m.The asset value was stated as $183,000,000, the vendors were existing shareholders of Exego Group Pty Limited AOF Beta BV, Netherlands (77.1%) and Australian Public (22.9%). The OIO states:” The investment will provide the Applicant with a significant stake in New Zealand’s leading automotive aftermarkets parts distributor”. Watchdog readers may not have heard of Exego, but will probably have heard of Repco, its’ major subsidiary trading here in New Zealand.

Lendlease Restructures Its Dress Smart Malls

Lend Lease Group entities being Lend Lease Real Estate Partners New Zealand, Lend Lease Real Estate Investments Limited, Sub-Trust and Lend Lease Funds Management Limited Australian Public (77%), United States Public (8.9%), United Kingdom Public (7.3%) and various overseas persons (6.8%) received approval for the acquisition of a freehold interest in 3.4 hectares of land at 24 Main Road Tawa, Wellington, and an 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 (that property being assets acquired from Lend Lease Investments Pty Limited including the sensitive land). Consideration was stated as $197,000,000; the vendor was Lend Lease Investments Pty Limited Australian Public (77%), United States Public (8.9%), United Kingdom Public (7.3%) and various overseas persons (6.8%), i.e. there has been no effective change in ownership.

The OIO states: “The overseas investment will allow Lend Lease Group to continue its involvement in the assets (which were acquired in 2010 being a portfolio of four shopping centres in New Zealand known as Dress Smart Tawa, Median Mall, Dress Smart Hornby and Dress Smart Onehunga) in order to maximise returns and provide greater access to capital in order to better operate and develop those assets. The Applicant will utilise Lend Lease Group’s retail skills, resources and experience to assist in the ongoing investment and management of the assets”.

As Anne Gibson reported in the New Zealand Herald (10/1/12): “The outlet chain was originally established by author, publisher and photographer John Bougen and his associates at Parnell-based Prime Retail who nine years ago sold to Australia’s ING Retail. The Australians paid $63.35 million for the portfolio of what was then three Dress Smarts in Auckland, Wellington and Christchurch (Hornby). In 2011 Lend Lease – 77% Australian-owned and 9% United States-owned – bought the chain in a deal which also involved OIO approval”.

See our April 2010 commentary for details of Lend Lease’s initial purchase of these properties and our March 2003 commentary for details of ING’s original purchase of the Dress Smart factory outlets. In April 1998 Lend Lease purchased a 50% interest in Kiwi Income Property companies. It also owns 25% of Morrison & Co which manages Infratil, an investor in utilities including Wellington Airport, Port of Tauranga, Central Power and Trust Power, and finalist for the 2009 Roger Award. See our detailed March 1999 commentary for details of Infratil and Lend Lease’s chequered history of infrastructure asset ownership.

Another Countdown For Tauranga

General Distributors Limited received approval for the acquisition of a freehold interest in 3.2 hectares of land at 44 & 50 Bureta Road, Otumoetai, Tauranga. Consideration was stated as confidential; the vendors were Bureta Park Motor Inn Limited & The Brian Perry Charitable Trust New Zealand (100%). The OIO states:” The Applicant is seeking to expand its operations across New Zealand and the land is being acquired to enable the Applicant to implement its business investment plans. The acquisition will enable the Applicant to increase its presence in the Otumoetai area”. See our June 2005 and November 2009 commentaries for details on other land purchases by General Distributors. Generally speaking, however, once these supermarkets have been built, they are sold and leased back by Progressive (see April 1999, December 2002, and September 2004)

Skeggs Sells Waiau Salmon Fishery To Malaysian-Owned NZ King Salmon

The New Zealand King Salmon Co. Limited Tiong Family, Malaysia (53%), New Zealand Public (45.5%) and ING Private Equity Access Limited, Australia (1.5%) has received approval for the acquisition of a freehold interest in 5.7 hectares of land at 762 Rotherham Road North, Waiau. The vendor was Pacifica Salmon Limited Skeggs Group Limited, New Zealand (100%); consideration was $950,000.The OIO states: “The Applicant is a salmon farming, processing and marketing company. The Applicant considers that the acquisition of the land at Waiau, which contains a salmon fish hatchery, represents a good strategic fit with its existing activities and will increase its production capacity”. See our commentaries for September 1995, February 1996 and September 2009 for details of the original purchase of NZ King Salmon by the Tiong family, one of Malaysia’s most powerful and wealthy families. They also own Ernslaw One which is the fourth largest forestry owner in Aotearoa, controlling approximately 100,000 hectares.

Other November Decisions

Aro Ha Group (being Aro Ha Custodians Limited, Aro Ha Investment Trust and Aro Ha Limited) Christopher Bailey Madison, Elizabeth Fening Madison and William Damian Chaparro, United States of America (100%) received approval to acquire a freehold interest in 6.6 hectares of land at Wyuna Preserve, Queenstown. The vendor was Wyuna Station Joint Venture Cabo Limited, New Zealand (60%) and Pisidia Holdings Limited, New Zealand (40%); consideration was $5,000,000.

According to the OIO: “The Applicant is acquiring the land in order to establish a sustainable world class health retreat which will provide accommodation for up to 32 guests”. Wyuna Station Joint Venture acquired Wyuna in 1999. That purchase was primarily a leasehold arrangement and is covered in our commentary of March 2000. The acquisition did not need Overseas Investment Commission consent because the US interest was at that stage just 0.1% below the 25% threshold requiring approval. However the US partner did not apply for approval for a mortgage it held over the property, and therefore in March 2005, at the same time as receiving consent to freehold 2,695 hectares, it received a retrospective approval for the “interest in land” (mortgage) which it held without the required legal approval for those six years. See our March 2005 commentary for details, as well as our August 2010 commentary for details of the transfer to Cabo Limited.

Fletcher Concrete and Infrastructure Limited New Zealand Public (47.8%), Australian Public (29.4%), United States Public (12.3%), United Kingdom Public (6.7%) and various unknown overseas persons (3.8%) received approval to acquire

a freehold interest in 197.3 hectares of land at 128 Durham Road, Waipu; and
a freehold interest in 1.3 hectares of land at Waikohua Place, Ruakaka; and
a freehold interest in 55.3 hectares of land at Matakana Road, Warkworth.

Consideration was stated as confidential. The respective vendors were Marriott Farms Limited, Wharehine Ruakaka Limited and Wharehine Developments Limited (all Stephen Robert Dodd, New Zealand (50%) and Phillip John Schmidt, New Zealand (50%).

The OIO states: “To acquire a ready-mix concrete business from Amalgamated Concrete Co Limited, the Applicant was required to purchase the Land from the Vendors. The acquisition of the concrete business will enable the Applicant to expand its concrete production and secure access to existing plant and equipment. The Applicant intends to divest the Land”. For details of other land purchases here by Fletchers, see our commentaries for March and July 2007, March and June 2008, June, September and October 2009, and April 2011.

GMO Glenburn Limited Grantham Mayo Van Otterloo & Co LLC, United States of America (51%), Eva Greger Morse, United States of America (19.9%), Robert Saul, United States of America (15.4%), Ian Gordon Jolly, Kristine Jean Jolly and Colin Stanley McGregor as trustees of the Jolly Family Trust, New Zealand (13.7%) received approval to acquire a freehold interest in 4 hectares of land at Glenburn Station, Wairarapa. Consideration was $0. The vendor was Glenburn Station 2007 Limited Helen McFadzean and John McFadzean and the Glenbrae Trust, New Zealand (100%).

The OIO states: “In March 1998 the Applicant obtained consent to acquire 5,899 hectares of land known as Glenburn Station on the east coast of the South Wairarapa. In June 2002 the Applicant obtained consent to acquire the adjoining 630 hectares of land known as the Dunolly Block situated at Craigie Lea Road, Masterton. In March 2007 the Applicant sold Glenburn Station to Brooklands Station 2005 Limited. The ownership of Glenburn Station has since been restructured so that it is now owned by the vendor. Trees have been planted right up to the physical fence of the Dunolly Block as all parties considered that the physical fence was the legal boundary. The acquisition represents a boundary adjustment to realign the legal boundary with the physical fence dividing Glenburn Station and the Dunolly Block”. See our May 1998 commentary for details of GMO’s controversial acquisition of Glenburn Station and June 2002 commentary for details of the Dunolly Block purchase.

Malcolm Neil & Lisa Beck United Kingdom (100%) received approval for the acquisition of a freehold interest in 6.1 hectares of land at 39 Mangaroa Road, Hastings. The vendor was Paki Paki Lodge Limited Terry Patrick Coffey, New Zealand (100%); consideration was $1,100,000. The OIO states: “Malcolm and Lisa Beck intend to reside in New Zealand indefinitely. They both have experience in the equestrian and horse stud industry and intend to establish their own horse stud on the property”.

Kina Beach Enterprises Limited Achim Rolf Bauer, Switzerland (50%) and Karin Elisabeth Schoch, Switzerland (50%) received approval to acquire a freehold interest in six hectares of land at 21 Dee Road, Kina Peninsula, Tasman Region. The vendor was Kina Beach Vineyard Estate Limited David John Birt, New Zealand (100%); consideration was $2,055,000. The OIO states: “The Applicant intends to further develop the vineyard contained on the property and also develop a dedicated export business”.

Vela Wines LLC Arie M Dahan, France (50%) and Maksim Risman, United States of America (50%) received approval to acquire a freehold interest in 36 hectares of land at State Highway 6, Luggate-Cromwell Highway, Locharburn, Otago. The vendor was Otago Crown Wines Limited Stephen Herbert Sawatske, United States of America (100%); consideration was $1,625,000. The OIO states: “The Applicant is seeking to purchase the land in order to own and operate the vineyard located upon it. It intends to use the fruit from the vineyard to make its own premium Pinot Noir wine and export it to North America, Europe and Asia”.

Bardfield Farms Limited Mark Purcell Tapper, New Zealand (25%), Garth Walton & Jan-Maree Smith and Nicholas Johannes Hoogeveen, New Zealand (25%), Alpair Pty Limited, Australia (16.7%), Doug Hall Poultry Pty Limited, Australia (16.65%) and Campastco Pty Limited, Australia (16.65%) received approval to acquire a freehold interest in 10.2 hectares of land at 207 Substation Road, Hororata, Canterbury. The vendor was Edwin John Cross & Margaret Louise Ellis New Zealand (100%); consideration was $495,000. The OIO states: “The Applicant is a wholly owned subsidiary of PIC NZ Holdings Ltd. The acquisition of the property will enable PIC NZ Holdings Ltd to increase, expand and develop its genetic breeding and pork products business in New Zealand”. See our October 2009 commentary for details of PIC’s original purchase of Bardfield including two pig farms.

And finally for November, a confidential decision. All we know at this stage is that it was approved on 9 November 2011 and that transaction has satisfied the criteria in section 18 of the Overseas Investment Act 2005. Naturally we have appealed this suppression.

Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.