Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – January 2010 Decisions
Pass The Parcel – Two Degrees Mobile
The most significant approval in January was another deal involving Two Degrees Mobile. Specifically, Trilogy International New Zealand LLC United States of America (75.1%), Cayman Islands (15.1%), Haiti (6.8%), Various (3%) received approval to acquire rights or interests in up to 100% of the shares of Two Degrees Mobile Limited, the value of the assets of Two Degrees Mobile Limited and its 25% or more subsidiaries being greater than $100m. The asset value was $170,107,313 (as at 31 March 2009); the vendor was Existing shareholders of Two Degrees Mobile Limited other than Trilogy International New Zealand LLC New Zealand (41.5%), Austria (37.2%), Ireland (7.4%), Hong Kong (Special Administrative Region) (5.4%), Liechtenstein (5.3%), Switzerland (2.7%), Germany (0.5%). The OIO states:
“The Applicant is part of the Trilogy Group of companies which invests in wireless businesses and currently owns 51.51% of the issued share capital of Two Degrees Mobile Limited (Two Degrees). The Applicant intends to acquire further ordinary shares in Two Degrees through participation in proposed pro rata capital raisings from existing shareholders, if such shares become available, and also wishes to have the right to take up available ordinary shares in capital raisings that are not taken up by the shareholders in accordance with their entitlements. This may result in the Applicant increasing its percentage interest in Two Degrees”.
You will recall from our November 2009 commentary (above) that Tesbrit BV (Austria) had received approval to acquire up to 75% of Two Degrees Mobile. Given that the existing shareholder profile has changed substantially from the November approval, presumably that first deal went through. See our October 2008 commentary regarding Trilogy receiving OIO approval to acquire 100% of NZ Communications (originally Econet) which was building the network to become known as Two Degrees Mobile. Most information was suppressed by the OIO, but various media sources reported the deal in some detail – see here. For an excellent commentary on the history of Two Degrees (started by “two men and a photocopier”), its impact on the Vodafone/Telecom mobile duopoly and issues generally in New Zealand mobile communications market, see this item by Jenny Keown.
Decision # 200920079
Aussies Consolidate Control Of Technology Leasing Business
CSG Limited Australia (100%) received approval for the acquisition of rights or interests in 100% of the shares of Leasing Solutions Limited, the consideration of which exceeds $100m, and an overseas investment in significant business assets, being the Applicant’s acquisition of rights or interests in 100% of the shares of Onesource Group Limited, the consideration of which exceeds $100m.Consideration was $132,000,000 with the vendor being Leasing Solutions Holdings Limited Australia (76%), Belgium (14%), New Zealand (10%) and Onesource New Zealand Limited Australia (76%), Belgium (14%), New Zealand (10%). The OIO states:
“The proposed transaction involves two related share acquisitions being the acquisition of all of the shares in Onesource Group Limited (OGL) and Leasing Solutions Limited (LSL). OGL is a leading office technology group operating in New Zealand and Australia which owns 90% of Konica Minolta Business Solutions Limited (KMBS). LSL is a specialist provider of rental and lease products that are tailored to technology assets and document solutions. The proposed acquisition provides an opportunity for the Applicant to expand its business into overseas markets”.
Details of this deal were reported by Maria Slade in the NZ Herald (14/1/10): “The new Au stralian parent of Konica Minolta New Zealand plans to expand its associated leasing operation across the Tasman, where it says there is huge potential for growth. ASX-listed CSG announced before Christmas it was spending $132 million on a 90% stake in Konica Minolta and buying 100% of its leasing arm, Leasing Solutions. CSG runs an identical print services business in Australia, where it has the Fuji Xerox dealership. It also has information technology (IT) outsourcing and application-development businesses. But it does not have its own leasing business, and managing director Denis Mackenzie said it planned to take Leasing Solutions to Australia to do the same thing there. ‘We could double or triple the size of the business over the next few years’.
“Leasing Solutions had been run conservatively and had continued to make money through the recession, experiencing a loss rate of less than 1%. In New Zealand this week to finalise the sale process, Mackenzie said the purchase of Konica Minolta was a unique opportunity because it was an independent company which represented one of the major business-machine manufacturers. The New Zealand operations, collectively known as the Onesource group, were bought from finance company Hanover Group for $150 million in a management buyout four years ago. Chief executive Evan Johnson led the buyout and will stay on as managing director under the new ownership.
“Despite the price discrepancy between the Hanover and CSG deals, Johnson said the group had consolidated its position and the shareholders had come out on top. Mackenzie said Konica Minolta was profitable and had grown rapidly. Earnings before interest, tax, depreciation and amortisation were $20 million in the last financial year, on revenues of $120 million. He said there was increasing convergence between print services and IT, and CSG planned to expand its IT businesses to New Zealand. ‘We will look to grow those businesses here either through further acquisitions or through organic growth’. There were also best practice sharing opportunities between the two countries. Konica Minolta had the lion’s share of New Zealand Government contracts. CSG is headquartered in Darwin and is about to complete an $A65 million share placement to fund the New Zealand acquisition”.
Decision # 200920091
Wealthy Singaporean Needs 2,000 Ha To Reside Here
Ding Furu Singapore (100%) received approval to acquire a freehold interest in 1,921 ha of land at State Highway 1, near Puhoi, Northland. The vendors were Prime Resources Company Limited New Zealand (91.2%), South Korea (8.8%); consideration was kept confidential. The OIO states: “The Applicant intends to reside in New Zealand indefinitely. His application for residence under the Professional Investor Category has been approved in principle by Immigration New Zealand, and he is currently making preparations to reside in New Zealand indefinitely”. Ding Furu is founder and Chairman of New Development Group, a large Chinese-based transnational with interests in real estate development, hotels, wood, storage, and trade and investment.
Decision # 200821557
US Investor Buys Gravitas And Waimea Estate Vineyards
In two separate decisions The Saint James Company LLC United States of America (100%) has received approval to acquire a freehold interest in 39.1 ha of land at 45 Lanark Lane & State Highway 63, Renwick, Marlborough from Gravitas Limited New Zealand (100%) for $9,000,000. Secondly The Saint James Company LLC received approval to acquire a freehold interest in:
- 13.3 ha of land at 148 Main Rd Hope, SH6, Hope, Nelson
- 8.8 ha of land at 71 Lansdowne Rd, Appleby, Nelson
- 17.9 ha of land at 59 Appleby Hwy, SH60, Appleby, Nelson
- 19.8 ha of land at 254, 286 and 288 Ranzau Rd, Hope, Nelson
- 10.3 ha of land at 71 Landsdowne Road, Appleby, Nelson.
Approval was also received for an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 100% of the shares of Bolitho Vineyards (Hope) Limited which owns or controls a freehold interest in 41.7 ha of land at 394, 416 Main Rd, SH 6, Hope, Nelson. And an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 100% of the shares of Waimea Estates (Nelson) Limited which owns or controls a freehold interest in 10.9 ha of land at 59 Appleby Hwy, SH 60, Appleby, Nelson.
The vendors were Trevor Herbert Bolitho, Robyn Mary Bolitho and Ian James Turner as trustees of the Trevor & Robyn Bolitho Family Trust New Zealand (100%), Trevor Herbert Bolitho and Robyn Mary Bolitho New Zealand (100%), AC Bolitho, BC Bolitho, Knapps Lawyers Trustee Company 2004 (No. 2) Limited, IJ Turner, RM Bolitho & TH Bolitho New Zealand (100%), AC Bolitho, BC Bolitho and Knapps Lawyers Trustee Company 2004 (No. 2) Limited New Zealand (100%), IJ Turner, RM Bolitho, TH Bolitho & JV Bolitho New Zealand (100%). Consideration was stated at $34,571,250.
In respect of both approvals, the OIO largely states the same thing, namely: “The Applicant is in the process of building a portfolio of international wine brands through acquisitions, licences and organic growth. The Applicant is proposing to acquire wineries and/or license well regarded brands in New Zealand and Australia. The Applicant proposes to acquire the land and business known as the Waimea Estates vineyard and winery. The land comprises nine separate freehold lots all located in or around Nelson. The Applicant is also acquiring the Gravitas vineyard and winery.
“The acquisition of multiple wineries in New Zealand allows the Applicant to bring together the complementary capabilities of each of the wineries. The wineries have excellent synergies and collectively cover the key market sectors and price points from premium to ultra premium. Individually, however they lack the critical mass to effectively penetrate foreign markets particularly the United States market”. See our commentaries for October 2009 regarding other US purchases of Kiwi vineyards.
Decision # 200920026 and 200920027
Summary Statistics January 2010
Asset Value
| January 2010 | January 2009 | |
|---|---|---|
| Number of approvals | 5 | 10 |
| Net Investment $ | 93,152,008* | 30,124,917 |
| Gross value of consideration | 204,461,251* | 32,412,004 |
| Asset Value | 170,107,313 | 540,000,000 |
* Stated as confidential by the OIO, but calculated by CAFCA from subsequent OIO tables
Freehold land approved for sale
| January 2010 | January 2009 | |
|---|---|---|
| Number of approvals | 3 | 9 |
| Net land area (ha) | 1,914 | 538 |
| Gross land area (ha) | 2,083 | 1,143 |
Other interests in land approved for sale (for example leases and crown pastoral leases)
| January 2010 | January 2009 | |
|---|---|---|
| Number of approvals | 0 | 5 |
| Net land area (ha) | 0 | 2,009 |
| Gross land area (ha) | 0 | 25,980 |
Applications declined
| January 2010 | January 2009 | |
|---|---|---|
| Number of Declines | 0 | 0 |
| Total proposed purchase price ($) | 0 | 0 |
| Total proposed area to be acquired (ha) | 0 | 0 |
Fishing Quota
As usual there was no fishing quota approved for sale this month.
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