December 2002 decisionsJB Were buys Viking Pacific subsidiaries Macquarie buys Foodland’s Takapuna Foodtown supermarket to lease back Quack-a-Duck: Australian buys remaining shareholding CDL Land buys Albany motorway land for subdivision Fletcher Residential buys Greenhithe, North Shore land for subdivision Two more Waihi properties bought for buffer around mines Rausing family (Ingleby company) buys another 1,950 hectares in Gisborne
JB Were buys Viking Pacific subsidiariesJB Were (NZ) Private Equity Limited/Special Managed Investment Company No.64 Limited, owned by JB Were Group Holdings Pty Limited of Australia, has approval to acquire the subsidiaries of Viking Pacific Holdings Limited, owned 84.01% by Goldman Sachs of the U.S.A. and 15.98% in Aotearoa, for a suppressed amount. The subsidiaries are:
The purchase includes Viking Pacific’s headquarters and the following land:
“The Applicant is the manager of a private equity fund which is New Zealand based and focused. …
The proposed acquisition is for seven of the vendor’s subsidiary companies being New Zealand Insulators Limited a manufacturer of pottery, electrical grade ceramics and circuit protection devices/insulators, Masport Foundries Limited a mechanised iron foundry, Masport Limited a manufacturer and supplier in the lawn, garden and home heating sectors, Pacific Wallcoverings Limited a wall covering manufacturer, A & G Price Limited a heavy engineering business, R H Freeman & Co Limited a sheetmetal production engineering and laser cutting operation, and Paykel Limited a distributor of engineering, industrial and marine products. The vendor is divesting these companies as a result of a process to enable its fund manager to exit New Zealand.”
Viking Pacific was put together in 1998 by Goldman Sachs from the wreck of the excessively leveraged Maine/Skellerup management buyout it sponsored. See our commentary for September 1998 for further details. It had already sold parts of the company before the present sale: it floated Skellmax Industries, comprising Skellerup Industries (the original core of the collapsed company) and pumpmaker Flomax, earlier in 2002. Macquarie buys Foodland’s Takapuna Foodtown supermarket to lease backMacquarie CountryWide Trust of Australia has approval to acquire 1.4 hectares at 2-13 Barrys Point Road, Takapuna, Auckland for $14,551,875 from General Distributors Limited, a 100% subsidiary of Foodland Associated Limited of Australia.
“The Applicant [Macquarie] is an Australian listed property trust with significant investments in supermarkets and food based convenience retail property in Australia, New Zealand and United States of America. …
The Applicant will lease back the supermarket being acquired to the vendor. The sale and lease back arrangement will free up capital for the vendor to enable it to concentrate on its core business activities.”
Macquarie itself described the transaction as follows:
“CountryWide added another property to its New Zealand portfolio for NZ$12.935 million at an initial yield of 8.5 per cent. The property is a new standalone Foodtown supermarket (a major supermarket chain in New Zealand owned by Foodland Australia) in Takapuna on Auckland’s North Shore. This takes the New Zealand portfolio to 17 properties, representing 11 per cent of CountryWide’s total portfolio.” (“Macquarie CountryWide Trust announces 28.5% increase in operating income”, 13/2/03, http://www.macquarie.com.au/au/property/mcw/news/20030213a.htm).
It is not clear why there is a $1.5 million discrepancy in the prices given by the two sources. Quack-a-Duck: Australian buys remaining shareholdingBonenzio Pty Limited, owned by Giuseppe Bonaccordo of Australia, has approval to acquire up to 100% of “the Bonaccordo, Forster and Ilett Joint Ventures” for $392,500 from Ilenzio Pty Ltd and Forsenzio Pty Ltd, owned 50% each by Mark Keith Forster and Lloyd Richard Ilett, both of Australia. The joint ventures own 8.0 hectares at 346 Orepunga Road, Horahora, RD2, Cambridge, Waikato.
The Applicant is proposing to acquire from Forsenzio Pty Limited and Ilenzio Pty Limited the remaining 12.5% interest in a joint venture that was established in 1997. The joint venture carries on business under the name “Quack-a-Duck” and breeds ducks for commercial rearing with the view to their slaughter, processing and sale, dressed on the domestic New Zealand market. The Applicant’s core business is in the duck industry and it is proposed to further develop and enhance the business.
In March 1999, we reported that Guiseppi Bonaccordo, through his company Bonenzio Pty Ltd, had approval to acquire another 12.5% of a Cambridge, Waikato duck breeding and processing facility he owned with two other Australians, Mark Keith Forster (through Ilenzio Pty Ltd) and Lloyd Richard Ilett (Forsenzio Pty Ltd). The ownership was formerly 75%, 12.5%, 12.5%; it would be 87.5%, 6.25%, 6.25% after the transaction.
In July 1998 we reported the acquisition of the land at Horahora. It was the result of the falling out of a 50/50 joint venture approved by the OIC in September 1997 between Australian and New Zealand partners. “Rather than embarking upon protracted litigation” after “substantial disputes”, they agreed that the Australian syndicate or its nominee would purchase the remaining 50% interest in the business. CDL Land buys Albany motorway land for subdivisionCDL Land New Zealand Limited, according to the OIC ultimately owned 57.7837% in Aotearoa, 22.0833% by the Hong Leong Group of Singapore and 20.133% in other shareholdings in Singapore, has approval to acquire 10.4 hectares at Kewa Road, Albany, Auckland for $660,093 from The Crown.
“The Applicant’s core business is the acquisition of land for development and subdivision. The proposed acquisition will further strengthen and grow the Applicant’s land bank and development portfolio. The subject property was acquired by The Crown in 2001 for motorway purposes and is no longer required. It is proposed that the subject property will be subdivided into 96 residential sections to be made available for sale to the open market. It is envisaged that due to development and planning issues that the sub-division will be undertaken in at least three years time.”
CDL Land is a 100% subsidiary of CDL Investments New Zealand Ltd, itself a 60.12% subsidiary of CDL Hotels New Zealand Ltd according to CDL Investments’ 2002 Annual Report. CDL Hotels New Zealand Ltd owns the largest hotel chain in Aotearoa and its 70.22% shareholder is Millennium and Copthorne Plc, a 52.4% subsidiary of CDL Hotels International Ltd, which is the Hong Leong Group’s principal hotel investment company.
CDL Land last received OIC approval to acquire land in July 2000, when it acquired eight hectares from the Manukau City Council. See our commentary for that month for further details. Fletcher Residential buys Greenhithe, North Shore land for subdivisionFletcher Residential Limited has approval to acquire 3.2 hectares at Kyle Road, Greenhithe, North Shore, Auckland for $6,045,000 from Dannemora Property Trustee Limited.
“The Applicant proposes to acquire the subject property to construct up to 39 residential dwellings on the land which is currently being subdivided by the vendor. The acquisition is viewed as an expansion of the residential building business of the Applicant in the Auckland region. The Applicant concentrates its business on residential housing development rather than residential land subdivision. The vendor is completing the necessary infrastructure for the subdivision which is likely to be completed by the of end 2003.”
According to the OIC, Fletcher Residential is owned, all in minority shareholdings, as follows: 57.7% – Aotearoa 12.7% – Australia 9.3% – United Kingdom 8.7% – U.S.A. 2.7% – Hong Kong 0.6% – Japan 8.3% – Various Unknown Overseas Persons
Dannemora Property Trustee Ltd is ultimately owned as follows: 50% – Dannemora Holdings Limited of Aotearoa 32.5% – minority shareholdings in Aotearoa 10.5% – Royal Dutch Petroleum Company (N.V. Koninklijke Nederlandse Petroleum Maatschappij) of the Netherlands 7% – Shell Transport and Trading Company of the U.K.
It is in fact a joint venture between Dannemora Holdings and Fulton Hogan Ltd, which is 35% owned by Shell New Zealand. Two more Waihi properties bought for buffer around minesWaihi Gold Company Nominees Ltd, owned 96.4228% by the Newmont Mining Corporation of the U.S.A. and 1.7886% each in Australia and Aotearoa, has approval to acquire
In the first case,
“The Applicant proposes to acquire a lifestyle property that adjoins land recently acquired by the Applicant for the proposed Favona Underground Project. The Applicant advises that it is likely that underground mining will be undertaken up to the boundary and underneath the property. The property will be utilised as a buffer area around the mine operations.
The Applicant’s current open cast mine operation, the Martha Mine, is expected to close in approximately 2007. The Favona Underground Project for which the Applicant has completed a feasibility study will require a significant capital investment to establish the underground gold mining operation. There will likely be few surface effects apart from the air vent shaft, the access portal and the infrastructure required to service the underground workings and transport the ore to the existing processing plants.
The Favona Underground Project requires a mining permit under the Crown Minerals Act 1991, resource consents under the Resource Management Act 1991 and a variation to the existing mining licence under the Mining Act 1971. The Applicant has advised that if the necessary consents are not forthcoming then they will sell the properties acquired.”
The second property is for the Martha Mine:
“The subject property is adjacent, separated by Seddon street, to the mining licence area for the Martha Mine operated by the Applicant. The subject property is significantly affected by the current mining activities and the recent extension to the Martha Mine that extended the life of the mine for about an additional seven years. The Applicant is proposing to acquire the property to add to the buffer between the mine and surrounding residential properties.
The acquisition of the subject property will enable the existing Martha Mine to continue operations with an increased buffer zone between the mining operations and residential properties thus ensuring the continuation of the benefits that have already accrued from the mining operations.”
The description for the second acquisition is a variation on a formula that has been used repeatedly as properties have been bought up around Martha Mine, and obviously has not been updated. Otherwise the two applications would not contradict each other on the life of the mine.
Most of the recent acquisitions for the Martha Mine have been because of major subsidence problems in Waihi due to mine excavations. See our commentary on the July 2002 decisions for a reference to this and the last Favona Mine land purchase. Land for wine· Limestone Creek Vineyards Limited, owned by P Thomas of Aotearoa, has approval to acquire 153 hectares at Omihi Road, Waipara, Canterbury for $1,687,500 from MH and PL Kerr of Aotearoa. “The Applicant proposes to acquire the subject property which is currently used for a pastoral sheep and beef operation. The Applicant advises that approximately 60 hectares to be planted predominantly in Pinot Noir with some Riesling, Pinot Gris and Sauvignon Blanc. Some of the remaining 93 hectares of the property will be utilised as access ways and storage as the plantable areas are not all adjoining each other. It is envisaged that approximately 50 hectares of the property is likely to be leased to a neighbouring farmer for grazing purposes.” To find out why a New Zealander required an OIC approval, see Limestone Creek’s previous purchase, in our June 2002 commentary. · Gibbston Valley Wines Ltd, ultimately owned 50.7% by S. and M. Stone of Aotearoa, 31.2% by shareholders in the U.S.A., 11.4% in New Caledonia, 0.5% in the U.K., and 6.2% in minority shareholdings in Aotearoa, has approval to acquire 9.5 hectares at Loop Road, Bendigo Station, Central Otago for $225,000 from JC and HL Perriam of Aotearoa. “The Applicant operates a vineyard and winery operation with associated restaurant and tourist activities in Central Otago. The Applicant is a producer of high quality wines having done well at both national and international wine competitions. The subject property is part of a viticultural subdivision of Bendigo Station undertaken by the vendor. The subject property is currently planted in vines. By owning its own land and growing more of its own grapes the Applicant aims to exercise greater control over the vines and the supply and the quality of those grapes.” Gibbston Valley Wines’ last acquisition, in December 2001, was ten hectares at Gibbston Highway, Gibbston Valley, Central Otago, for $1,850,000. See our commentary for that month for further details. The Montagnat family of New Caledonia bought an interest in Gibbston Valley Wines in June 1999. The Perriams, major landowners in the area, sold another piece of land for viticulture in October 2002 to the US-owned Cote Sauvage Vineyard. (See our commentary for that month for further details.) · Andrus Family Trust NZ Holdings Limited, owned 55% by Andrus Family LLC, and 15% each by R Gary Andrus Revocable Trust, Andrus Family Children’s Trust, and Christine Lorraine Metz Andrus, all of the U.S.A., has approval to acquire 10.0 hectares at 16 Resta Road, Gibbston, Central Otago for $1,192,500 from WJ and JR Scott of Aotearoa. “The Applicant who is an experienced viticulturist/winemaker proposes to acquire the subject property which currently has one hectare planted in grapes. The Applicant proposes to establish the property as a vineyard in Pinot Noir. The Applicant intends to monitor the vineyard operations and apply his extensive expertise from his United States operations to improve the match of soils, climates and weather with the clones best suited for this region. This proposed acquisition is part of the Applicant’s business plan to acquire existing vineyards and bare land suitable for Pinot Noir production in Central Otago. In this regard Mr Andrus has previously obtained consent to acquire a 5.215 hectare property at Gibbston Valley and a 8.406 hectare property at Bannockburn. The Applicant proposes to establish a winery to process grapes from his properties and will use his established sales networks in the United States to export up to 8,000 cases of wine annually.” The Gibbston Valley purchase was approved in May 2002 and the Bannockburn one in August 2002 (see our commentaries for those months for details). Rausing family (Ingleby company) buys another 1,950 hectares in GisborneThe Ingleby Company Ltd, owned by The Ingleby Trust of the U.K., has approval to acquire 1,951 hectares at Waitahaia Station and Ruatahunga Station, Tokomaru Bay, Gisborne for $3,937,500 from JM Reynolds of Aotearoa.
“The Ingleby Company Ltd wishes to purchase the property (Waitahaia and Ruatahunga Stations) to complement its existing East Coast farming operations and in particular its adjoining property Puketoro Station which was acquired by the Applicant in 2001. Ingleby propose to continue to operate the property as a sheep and cattle farm.
The company’s objective in purchasing the property is to further develop and improve the property to enhance productivity and product quality. It is proposed that this property will be incorporated into the capital improvement programme currently being undertaken on Puketoro Station. Ingleby sees the purchase as increasing and enhancing its existing New Zealand agricultural interests by capital investment to improve the pastoral quality of the property and increasing the stock carrying capacity through the use of the resources and expertise available to the company.”
Ingleby is owned by the controversial billionaire Rausing family of the U.K. For details, and their last approval by the OIC, see our commentary on the February 2002 decisions. Other rural land sales· B Sabrier of the U.K. has approval to acquire 50 hectares at Mataka Station, Purerua Peninsula, Bay of Islands for a suppressed amount from Mataka Limited of Aotearoa. “The acquisition of this property by the Applicant is part of a rural lifestyle subdivision development on Mataka Station. The establishment and sale of the lifestyle lots will provide capital that will enable the farming operation of Mataka Station to become economically viable, and also to preserve and enhance the conservation and historic values of the property.” · Kaihere Alpacas Limited, owned 50% each by the Hamilton family of Australia and C P Leach of Aotearoa, has approval to acquire 23 hectares at 787 State Highway 1, Karapiro, Waikato for $618,750 from IA and A Langlands of Aotearoa. “The shareholders of the Applicant have extensive experience in the alpaca industry including the export of alpacas from South America to Australia, Canada, the UK and New Zealand via a quarantine facility on Niue Island. The Applicant obtained consent from the Commission to acquire a property at Ngatea to establish an alpaca operation in August 1999. The Applicant is now seeking to expand its current business and increase its support network for its growing client base. It is also anticipated that the property’s location will provide an opportunity to develop a tourist outlet retailing New Zealand made alpaca garments/products alongside informative tours of the alpaca enterprise.” See our commentary for August 1999 for further details. At that time, CP Leach was a U.K. resident. · Yasuhiko Imagawa of Japan has approval to acquire 52 hectares at 1175 Happy Valley Road, RD, Greta Valley, North Canterbury for $196,875 from JD and FJ Perriam of Aotearoa. “The Applicant is experienced in the international wool trade and the promotion of specialist wools in the Japanese mass (futon) market. Mr Imagawa received approval to acquire a 461 hectare sheep and beef farm in North Canterbury in 1995. Productivity has been increased on the existing farm property through increased applications of fertiliser and an extensive eradication programme of noxious weeds such as gorse. He proposes to acquire a further 52 hectares from an adjoining land owner to further increase productivity and efficiencies of the existing operation. The additional land will support an increased stock carrying capacity and provide a capability to grow strategic feed crops. The subject 52 hectares comprises part of a larger farm owned by the vendors who propose to sell this block to free up capital.” Imagawa’s previous approval was given in September 1994 and cost him $1.2 million. Summary statisticsAll investments As for previous months, the value of investment approved in the year to December 2002 is considerably higher than for the previous December year, but the net value (i.e. disregarding sales from one overseas investor to another) is considerably lower. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Investment involving land Gross sales of land approved by the OIC during the years to December have increased in area. Though net sales have actually fallen, they are still at a significant level – over 32,000 hectares during the year. Refusals (above) have risen in number, area and value, but are still a tiny proportion of the total, and there were none this month.
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