Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – April 2011 Decisions

Agria Now Controls PGG Wrightson

The most significant decision in April was Chinese interests taking over one of New Zealand’s largest rural services companies, PGG Wrightson. Specifically Agria (Singapore) Pte Limited/New Hope Group Agria Corporation (80.8%), New Hope Group Co. Limited (12.1%), and Ngai Tahu Holdings Limited (7.1%) received approval to acquire the rights or interests in a further 41% of the total issued ordinary shares of PGG Wrightson Limited which owns or controls:

a freehold interest in 4.5 hectares of land at Cotter Street, Te Kuiti; and
a freehold interest in 9.5 hectares of land at 57 George Street, Tuakau; and
a freehold interest in 11.8 hectares of land at 41-77 Centennial Park Rd, Wellsford; and
a leasehold interest in 18.1 hectares of land at Saleyard Rd, Bell Rd and Church Rd, Matawhero, Gisborne; and
a freehold interest in 19.1 hectares of land at Tinwald, Ashburton; and
a freehold interest in 1.4 hectares of land at Briscoe Street, Awakino; and
a leasehold interest in 7.6 hectares of land at Lee Road, Hamilton; and
a freehold interest in 7.8 hectares of land at Norfolk Rd, Masterton; and
a freehold interest in 5.9 hectares of land at 16 Takapau Road, Waipukurau; and
a freehold interest in 9.8 hectares of land at Kiwi Road, Wairoa; and
a freehold interest in 11.6 hectares of land at Young Road, Rangiuru; and
a leasehold interest in 53.1 hectares of land at Tancreds Road, Lincoln; and
a freehold interest in 47.3 hectares of land at Tancreds Road, Lincoln; and
a freehold interest in 7.3 hectares of land at Mangakakahia Road, Kaikohe; and
a freehold interest in 4.2871 hectares of land at 500 Maraekakano/Southhampton Street, Hastings; and
a freehold interest in ten hectares of land at 784 North Road, Lorneville, Invercargill; and
a freehold interest in 1.4 hectares of land at State Highway 25, Coroglen; and
a freehold interest in 7.5 hectares of land at Esk Road, Stratford; and
a freehold interest in 1.4 hectares of land at 22 Dobson Street, Ashburton; and
a leasehold interest in 0.6 hectares of land at Evans Street, Timaru; and
a freehold interest in 18.6 hectares of land at Owaka Hwy (Finnegand); and
a leasehold interest in 7.1 hectares of land at Temuka Road, Temuka; and
a freehold interest in 0.9 hectares of land at Tuhua Road Ongarue; and
a freehold interest in two hectares of land at Curletts and Wigram Roads, Christchurch; and
a leasehold interest in 8.6 hectares of land at Wackrow Street, Taumaranui; and
a freehold interest in one hectare of land at 292 Mersey Street, Invercargill.

Approval was also received for an overseas investment in significant business assets, being Agria (Singapore) Pte Limited’s acquisition of rights or interests in a further 41% of the total issued ordinary shares of PGG Wrightson Limited, the consideration of which exceeds $100m. Consideration was stated as estimated at $140,964,000 to acquire a further 31% of the total issued ordinary shares. To be advised, for up to a further 10% of the total issued ordinary shares. The vendors were Existing Shareholders of PGG Wrightson Limited other than Agria (Singapore) Pte Limited New Zealand Public (73.4%) and various overseas persons (26.6%)

The OIO states as background to this approval: “Agria Singapore Pte Limited (Agria Singapore) sought consent to acquire, partly by way of a partial takeover offer, up to 41% of the total issued shares in PGG Wrightson Limited (PGGW). Agria Singapore currently holds 19.01% of the issued ordinary shares of PGGW. Agria Singapore has made a partial takeover offer to acquire up to 50.1% of the issued ordinary shares of PGGW (i.e. for 31% of the total issued ordinary shares of PGGW), but also sought consent to acquire up to an additional 10% shareholding, subject to NZX and Takeovers Code rules, to accommodate potential future changes to the capital structure of PGGW.

“PGGW is a limited liability company incorporated in New Zealand and is listed on the NZX. PGGW employs approximately 2,800 staff and operates a full spectrum of agricultural services. Agria Singapore’s support of PGGW will allow PGGW to continue to focus on and enhance its services for the New Zealand agricultural industry, and in particular New Zealand’s rural regions. PGGW’s position with the key growing Chinese market will also be enhanced with this more significant investment by Agria Singapore. New Hope Group Co. Limited (or a wholly owned subsidiary), a large Chinese agribusiness corporation, will be taking directly or indirectly approximately a 12.12% stake in Agria Singapore”.

Getting Control Of Seeds Business

In a report in the NZ Herald (9/2/11, “Seeds of doubt in Chinese bid for PGW”), Fran O’Sullivan speculated on the reasons for Agria’s interest PGGW: “The Chinese-backed bid for 50.01% of PGG Wrightson is really all about getting control of what happens to the rural services company’s most undervalued asset – a seeds business that Agria believes could ultimately be leveraged to become a multinational rival to America’s Monsanto. This is the real game plan behind the play that Agria and its new partner New Hope have launched with an opportunistic move while the PGG Wrightson share price is depressed.

“And it is also the reason why the Government must investigate exactly what Agria and New Hope bring to the table before they make a decision on whether to allow the partial takeover to proceed. More particularly, the range of conditions that should be imposed on the Chinese bidders (if they succeed) to ensure that New Zealand’s valuable horticultural seed stocks remain a prime asset that can further the growth of our own agriculturally intensive nation. That the Chinese bidders are thinking big is a given.

“Agria’s Xie Tao (XT) is a smart cookie. He is fundamentally a deal-maker. XT also thinks strategically, an attribute he shares with former PGG Wrightson Chairman Craig Norgate, whose own ambitions for the company were swamped by a tsunami of debt as the global financial crisis hit home. Trouble is none of those who have to assess the bid on the shareholders’ behalf seem to be able to divine what’s going on in XT’s head. It’s instructive that neither PGG Wrightson’s trio of independent directors – Chairman Sir John Anderson, Keith Smith and William Thomas – nor Grant Samuel, which issued an independent report to shareholders, could shed any light on what Agria/New Hope intend to bring to the table once they gain control of the company.

“As far as Grant Samuel goes, the advisory firm’s assessment of Agria’s bid to gain control over PGG Wrightson contains so many winks and nods that even the most wilfully blind shareholder ought to have no problem opting to keep their shares as a ‘hold’. More of which later. But the Independent Committee of Directors’ target statement is masterful in its understatement. The trio state Agria has said PGG Wrightson’s business requires restructuring and a refocus on the core businesses. Agria and New Hope have advised that they intend to take an active role in developing a new strategy for PGG Wrightson to improve operations and profitability.

“‘How this will be achieved has not been determined, but Agria has committed to working with the incoming Managing Director to achieve a turnaround of PGG Wrightson’s performance … There is of course, no certainty that Agria will achieve its stated performance enhancement aspirations. The extent of New Hope’s future involvement in PGG Wrightson is unknown. The Committee believes that New Hope is an entity with a large Chinese agricultural business backed by significant financial resources, and there is potential for PGG Wrightson to benefit from what New Hope may bring to bear through its investment in Agria. This potential benefit remains an unknown quantity, at this time’. In other words shareholders, we haven’t a clue about the motivations or long-term game plan of the very investors we brought in to provide financial stability for the company in late 2009 when it desperately needed capital.

Surely Not?

“You have to dig deep into Grant Samuel’s report before reaching the pivotal sentence: ‘It is likely that PGW’s substantial seed business is the primary attraction to Agria’. In its analysis of PGW, the advisory firm points out that its seed business is the largest Southern Hemisphere supplier of commodity and proprietary forage seed predominantly to New Zealand, Australia, South America and various other international markets. Its product range includes grass seeds, seed treatment products, forage legumes, forage brassicas, herb seeds, pea seeds and turf seeds.

“It is a market leader in New Zealand in forage, brassicas and turf, in Australia in proprietary and commodity forage products and a strong presence in South America through various investments in Uruguay, Argentina and Brazil. PGW’s seed products are focused on improving overall farm productivity and performance. On average New Zealand farmers re-pasture every 20 years. But PGW management estimates that optimal pasture activity could be achieved if New Zealand farmers moved to a ten year re-pasturing cycle (in other words you could double the business – my words not Grant Samuel’s).

“Grant Samuel goes on to say the business is also involved in the turf seeds market in New Zealand and Australia for application in sports grounds, parks and lawns. In November 2010 PGW completed the acquisition of the assets of Keith Seeds Pty Limited – an Australian pasture seed, food grade pulse (peas, beans, lentils) producer and seed processing and cleaning business based in South Australia. The Seeds division is supported by a strong research base and commercialises new products through internal research and development, breeding and evaluation programmes and joint venture research partnerships.

“The seeds business has a number of proprietary seeds that provide superior margins. In addition it has a large number of new cultivars in development. But having deduced that the seeds business is the prime value attraction for Agria, the advisory firm fails to apply the kind of dynamic analysis that would give shareholders an indication of the value that particular business would have for PGW itself if strategically leveraged further on the world stage. Frankly, it is difficult to understand why the PGW directors could not extract more information from Agria on this score. Its two directors on the PGW board are business savvy – not Beijing-style apparatchiks. They do not appear opaque.

“But the PGW directors are right on the button to point out that the company’s underlying trading performance is expected to improve as commodity prices flow through to rural property values and a reduction in debt burden for that sector. And to note that Pyne Gould’s decision to sell all of its 19% holding to Agria – at a price that the two players set for the partial offer – has more to do with funding its own commercial motivations elsewhere. What we do now know is that the Chinese bidders consider PGW’s finance book to be irrelevant to the long-term future of the company. Pointedly, Grant Samuel noted there is no evidence Agria (which has two directors on the PGW board) has had any material impact on PGW’s performance, or that the Chinese firm would on its own add any significant added value to the company and that its Chinese activities appeared to be relatively limited when compared with New Hope which is a very substantial company with extensive agricultural interests.

Ouch

“What Grant Samuel does not say is that Agria is purely a front – or intermediary – for New Hope. But given that the Chinese company ponied up the capital for PGW when it was on its knees in late 2009 and has held the shares until an appropriate Chinese player was ready to move, the inference is clear. And judging by the speed with which Canadian player Agrium has gained the Independent Board Committee’s approval to do its own due diligence prior to launching a 100% takeover, Sir John, Smith (who has made some frosty comments to media) and Thomas are quite uncomfortable with the Agria play.

“Irrespective of whether Agria gets over the line, as far as New Zealand’s strategic ‘national interests’ are concerned PGG Wrightson is of much higher importance than the 20 Crafar dairy farms that so exercised the public in 2010. PGW is a key NZ asset that should stay under New Zealand control – not pass into Canadian or Chinese control. It’s time for NZ Inc to swing into action: the NZ Super Fund, Fonterra (which looked at this asset earlier on), Landcorp and a few fellow travellers should surely be able to mount a spoiler bid”. Sorry Fran and the rest of New Zealand, it’s too late! Existing shareholders in PGGW seemed keen on the offer and Agria soon had 61% of PGGW. Perhaps they were keen to exit a company that hadn’t lived up to expectations for some time. Or was it because they had been kept in the dark as to what Agria was planning to do with the company?

Fran O’Sullivan in a follow up Herald article (20/4/11, “Left in dark over Agria takeover”) got stuck into the OIO: “‘Dateline Beijing, China, April 15, 2011 – Agria (Singapore) Pte is pleased to announce the New Zealand Overseas Investment Office has granted consent to Agria in connection with its takeover offer and shareholding in PGG Wrightson’. The Chinese company’s announcement that it had gained OIO approval to take control of New Zealand’s prime agricultural servicing company was also recorded on the NZX Website at 5.01pm on April 15. But five days later, the OIO has yet to record this fact on its own website.

“It frankly stretches credulity that the OIO has been so slack when it comes to publishing its own decision first, given the controversy that has attached to this particular partial takeover. Agria’s bid for control of PGG Wrightson raised plenty of eyebrows in New Zealand’s agricultural community. The takeover documents were virtually silent on Agria’s intentions for the company and the seeds business (its prime asset) which has been built on the back of good public research.

“PGG Wrightson’s independent directors – led by chairman Sir John Anderson – did not even signal to their shareholders what they believed Agria would do with the company once it got over 50.01% of the shares; the threshold which was set out in the formal takeover announcement on December 24, 2010. At Beehive level, Cabinet Ministers have shied away from commenting on the Agria bid. Chinese investment in New Zealand is seen as a politically sensitive issue.

“It is an issue ministers would rather not publicly confront this side of the election. But informed sources suggest there has been plenty of behind the scenes discussion on what sort of conditions should be put on the Chinese move to ensure it is a ‘win-win’ for New Zealand’s pastoral farmers and the bidding company. Surely, it is time to demystify exactly what is going on. Yesterday, the OIO released to me a copy of its ‘Decision Summary’ on the Agria partial takeover. The summary is maddeningly opaque. It confirms that on April 15, Agria (Singapore) Pte Ltd/New Hope Group was given clearance to buy 60% of PGG Wrightson – subject to NZX and Takeovers Code rules. Not 50.01% as set out in the original partial takeover offer.

“It also notes Agria Singapore comprises Agria Corporation which owns 80.79% of the bidding vehicle; New Hope Group (12.12%) and Ngai Tahu Holdings (7.09%). Three days after the OIO gave its approval to the deal, the NZX was informed of Ngai Tahu’s role. And by close of play yesterday Agria Singapore held 57.68% of PGG Wrightson. But what takes the cake is the way in which the OIO summary has been so remarkably opaque when it comes to spelling out just why it had approved Agria Singapore’s partial takeover bid.

“It basically says the overseas transaction satisfied criteria in two particular sections (16 and 18) of the Overseas Investment Act 2005. In essence the transaction would bring ‘substantial and identifiable benefits to New Zealand’ through new technology or business skills and increased export receipts. The application also satisfied tests relating to ‘key person in a key industry’ and ‘previous investments’. This is much less detail than the norm in a controversial transaction which has strategic ramifications for the New Zealand economy.

“But at PGG Wrightson’s Annual Meeting last year the company spelled out that the performance of its seeds and grain business was again a highlight ‘with a performance that is noteworthy in light of subdued international trading conditions’. Various PGG Wrightson slides went on to say the New Zealand business featured widespread adoption of endophyte technology AR37 and the commissioning of the Rolleston distribution centre. The seeds business had seen progress in creating a strong team in Australia with some success in the adoption of new products. The international seeds business also experienced a good trading year, meeting or exceeding all revenue and ebitda targets.

“On the research and development (R&D) front, the Grasslands Innovation Shareholders Agreement was signed in June 2010, increasing the PGG Wrightson Seeds ownership to 70% and consolidating all ‘our grass and legume breeding into this joint venture’. In another slide, the company said PGG Wrightson Seeds continued to build and support the adoption of technology packages for our South American customers, including the farmers in Uruguay and Argentina.

“NZ Ruralco, our new company in Brazil, gained traction in that market. During the year the company also finished the development of the Kiyu Research and Development farm facilities in Uruguay. The prime strategic takeout was the particular slide spelling out that PGG Wrightson ‘had the opportunity to build an Asian, Australasian and South American-centric Global Seeds business by linking Australia and South America with China. The global financial crisis will present opportunities to add to our seeds footprint and expand our ability to take our intellectual property portfolio to market’.

“It is clear that at the time these slides were composed (October 2010) PGG Wrightson must have seen itself as a driving force in the ambition to set up a global seeds business. But with Agria Singapore poised to take ‘partial control’ there has still been nothing from Sir John and the ‘independents’ which sheds light on why PGG Wrightson has allowed Agria to move into the pole position to drive the global strategy. Agria Chief Executive Tao Xie (XT) was ‘rather busy’ yesterday and unavailable to comment until next in New Zealand.

OIO Needs Lessons In “Fudge, Smudge & Nudge”

“Surprisingly, given the public interest in this takeover, the OIO would not release the conditions which have been imposed on Agria Singapore. It says it will have to hold discussions with Agria first on the nature and extent of public disclosure. Frankly this is not good enough. The OIO clearly needs a few lessons when it comes to the political art of ‘fudge, smudge and nudge’. When Agria originally bought into PGG Wrightson – essentially to save the bacon of the company and its debt-ridden prime shareholders – a cooperation agreement was formed under which, according to the OIO, the parties agreed ‘to take certain steps in relation to agricultural research and development, investment and establishment of various joint-ventures internationally’. That was more than two years ago. PGG Wrightson’s remaining minority shareholders – and the New Zealand farming community – deserve to be let into just what the new majority shareholders plan”.

Marta Steeman in the Press (27/5/11 “Agria kept application to itself, papers show”) reported on a similar theme “Chinese investor Agria refused to supply a copy of its application to buy control of leading farming firm PGG Wrightson to the independent consultants appraising the merits of it for PGGW shareholders. That is revealed in official documents released by the Overseas Investment Office to Businessday under the Official Information Act. It underlines Agria’s efforts to keep its plans for the leading rural services firm under wraps.

“Official documents show the OIO was not convinced Agria’s investment in PGGW would create jobs or lead to development in New Zealand. But the OIO accepted Agria’s claims in its application to take 50.01% in PGGW that increased export receipts to New Zealand would result, Agria’s investment in PGGW would bring new technology and business skills, and Agria’s key people were of good character. The OIO rejected Agria’s contention that not granting it consent would be inconsistent with the Free Trade Agreement with China. The OIO recommended ministers grant consent to Agria’s application and that was done last month.

“Business commentators and the independent appraiser of the partial takeover offer, Grant Samuel Associates, have commented on the scarcity of detailed information on Agria’s plans for the company. The OIO has included a copy of Agria’s application in the documents released, but it has deleted the part under the heading ‘Rationale for the Investment’ and deleted other parts related to benefits to New Zealand and market competition and efficiency and business development on the grounds the information would unreasonably prejudice the commercial position of the applicant.

“Agria’s application said its priorities were growing a seeds business in China and developing expertise in agricultural management, referring to the many small businesses in China. PGGW owned the largest seeds business in the Southern Hemisphere and had the experience of running a modern international seeds business. Agria wanted to acquire proprietary technologies and seeds businesses that had a significant competitive edge. Agria said its control of PGGW would increase that company’s connection with China and should make opportunities available to it as a result. It estimated PGGW’s gross assets were worth $957.6 million. It said the deal would benefit New Zealand and particularly its rural regions that used PGGW’s services.

“The documents include letters to the Takeover Panel and the OIO from what seems to be a law firm acting for a party concerned that Agria’s bid was primarily aimed at securing the highly lucrative seeds business. The names at the top of the letters have been deleted. Another letter reminded the Takeovers Panel that the Takeovers Code required a partial bidder to include in its offer document ‘the general nature’ of any material changes likely to be made in the business of the company that was being targeted.

“The letter said that requirement was important because with a partial offer shareholders were likely to retain part of their holdings. The letter said Agria’s statements about changes at PGGW were ‘at best, vague’ in its offer document. Agria said changes were likely to improve operations and profitability with particular focus on the two main business divisions, AgriServices and AgriTech, but not what changes were likely except that it supported the review of selling PGGW’s finance book.

“One of the letters to the OIO said speculation suggested Agria might split PGGW in two. The letter said the investment of large Chinese agricultural player New Hope in Agria did not appear to be material and may be limited to this one financial contribution. Another letter suggested the OIO should talk to former PGGW Managing Director Tim Miles for an informed opinion on ‘the strategic value and prospects of the PGGW seeds business’. New Hope’s investment has since been finalised and it is funding about 12% of the equity in the Agria company making the bid. The main player is Agria, funding 81%, with Canterbury’s Ngai Tahu Holdings Corporation chipping in with 7% equity, if PGGW shareholders consent.”

Steeman also reported the following day that Agria’s application to the OIO was not assessed against new “economic interests” factors, because its application was lodged just a few days before these factors came into effect. The last word for now on this sorry saga goes to another Press commentator, Chalkie. “Unless PGGW shareholders can show more fight than they have to date – given the meek acceptance of Agria’s takeover bid – then PGGW is likely to fizzle into history. Too many New Zealand businesses are simply being given up on”. See our detailed commentary in November 2009 covering Agria’s original purchase of 19% of PGGW.

Oceana Gold To Transform Its Macraes Mine Into A Superpit?

It seems clear from two separate approvals this month that Oceana Gold is planning to ramp up production at its Macraes mine in Central Otago. Firstly, on 20 April, Oceana Gold (New Zealand) Limited Australia Public (59.9%), Canada Public (28.9%), New Zealand Public (8.3%), and various (2.9%) received approval to acquire a freehold interest in 2,635.7 hectares of land at Deepdell Station Hyde/Macraes Road, Otago. The vendors were National Bank of New Zealand Limited as mortgagee Australia Public (95.7%) and New Zealand Public (4.3%). Consideration was to be advised, and no doubt will be a bargain given it is a mortgagee sale.The OIO states: “Mining operations will be extended to the land as part of the Applicant’s existing operation. This will contribute to the life of the Macraes Mine. The Applicant will lease out the land for farming purposes in the short term before beginning to mine any of the land. It is currently anticipated that mining on the land will begin within five years. The land that is not required for mining will be on-sold”.

In the second approval on 28 April, Oceana Gold (New Zealand) Limited Canada Public (49.9%), Australia Public (46.2%), New Zealand Public (3.1%), and various (0.8%), – note the significant change in shareholder profile over just eight days) – received approval to acquire a freehold interest in 999.4 hectares of land at 715 Hyde/Macraes Road, Otago. The vendor was Stephen Brian Holland, Margaret Michelle Holland and Brian Patrick Hailes as trustees of the Flat Stream Trust Brian Patrick Hailes, New Zealand (34%), Stephen Brian Holland, New Zealand (33%), and Margaret Michelle Holland, New Zealand (33%); consideration was $880,000 or just $880 per hectare!

The OIO states: “The Applicant operates Macraes Mine. In order to operate the Macraes Mine processing plant the Applicant, pursuant to a water right, extracts water from the Taieri River via a pipeline that runs over several properties, including the property that is the subject of this application for consent. An ancilliary mining licence under the Mining Act 1971 provided the Applicant with a pipeline easement to convey water over those properties. CONFIDENTIAL. In the short term the land will be leased out for farming. In the medium term, after the Applicant has upgraded the pipeline and created a registered easement to carry water the Applicant will be selling the property”.

Suppressed OIO Material Released To CAFCA

So what does “CONFIDENTIAL” mean in the background text released by the OIO? CAFCA appealed this to the Ombudsman, as we do with every Decision which is withheld in full or in part, and on 29 August 2011, the OIO released the following: “Under the Mining Act, ownership of the pipeline infrastructure will automatically vest in the land owner on 31 July 2011. The pipeline is essential to ensure the Applicant can continue to operate its processing plant at Macraes Mine.

“The Applicant is negotiating easements with relevant land owners but the vendor of the land the subject of this application already had the land on the market and therefore refused to grant an easement. Re-routing the pipeline has been considered but would be very expensive, technically challenging and would disrupt the Applicant’s operations. Accordingly, to secure the existing pipeline route and ensure the uninterrupted operation of its processing plant the Applicant has to buy the subject land”.

And what exactly is Oceana Gold planning to do at Macraes? One possible scenario was revealed by Simon Hartley in the NZ Herald on October 19: “Oceana Gold has floated a long term concept plan for a ‘superpit’ open-cast mining proposal at Macraes which could potentially increase estimated gold reserves by almost 70% to more than 2.6 million ounces. The Otago-based mining company yesterday stressed the superpit concept was long term, still being evaluated and a feasibility study had yet to begin, with many details of the size, scope and operational capacity of a superpit still to be quantified.

“Oceana is awaiting the outcome of a separate raft of recent resource consent applications from Otago and Waitaki Regional Councils to continue its mining operations. It is in its 21st year of production. A presentation by Chief Executive Mick Wilkes at the Denver Gold Forum last month outlined the ‘Macraes Superpit Concept’ where a larger open pit and new process plant could add an additional 100,000 ounces of gold a year to production, plus separate tungsten byproduct.

“This calendar year Oceana has forecast South Island gold production in a range of 255,000 to 270,000oz, but in tandem with a yet-to-be-commissioned gold/copper mine in the Philippines, is targeting annual gold production to increase to 600,000oz by 2016. Mr Wilkes said that in the United States the superpit concept would mean an expanded open pit, a new process plant and higher mining rate and ore throughput to gain the 100,000oz of gold per year.

“There could be a possible increase of the estimated gold reserve in Macraes’ open pits from the present 1.53 million oz to 2.6 million oz – a 69.9% increase. The recent consent applications in Dunedin included a description of the ‘Macraes phase III project’, part of a long term plan to extend the mine’s life from 2018 ‘to 2020 and beyond’ by expanding present operations and reopening previously mined areas, Oceana said in its opening submissions to the resource consent applications.

“‘Today’s high gold price means that previously mined open pits can now be mined deeper. Ongoing exploration may also further define new areas of economic interest’, Oceana said. Oceana’s Head of Business Development, Darren Klinck, yesterday said the superpit presentation was a ‘concept’ being evaluated in studies continuing into 2012. ‘Evaluating this potential opportunity is consistent with our strategy of ensuring we are looking at all opportunities within the organisation to unlock value within our current asset base’. Klinck said that as a producer for 20 years in the Macraes goldfield, Oceana could allocate time and resources to ensure the company was thinking ‘outside the box’, which was what it was doing with this project. He said it was too early to answer detailed questions on the superpit concept, and did not want to speculate on answers…” See our May 2006 and April 2009 commentaries for details of other Oceana Gold land purchases in the area.

Contact Energy Buys 764 Hectares From Us For Geothermal Power

Contact Energy Limited Various overseas persons (26.7%), Australia Public (23.8%), various (19%), New Zealand Public (14.6%), United States Public (6.2%), Asia Public (3.4%), United Kingdom Public (3%), Asia Investors, various (1.4%), Europe Public (1%), Europe Investors, Various (0.8%), and Middle East Public (0.1%) received approval to acquire a freehold interest in 764.2 hectares of land at 263 & 428 Broadlands Road, Taupo. The vendor was Landcorp Farming Limited New Zealand (100%), ie NZ taxpayers; consideration was stated as confidential.

The OIO states: “Contact is acquiring the property in order to support its geothermal power generation activities. The relevant land includes the main steam field area for both the existing Te Huka and new Tauhara Stage Two geothermal power stations”. For details of other land purchases by Contact Energy for the purposes of developing geothermal power, see our commentaries for July 2006, September 2007, January, July, October 2008, July 2009, and January 2010.

Germans Buy Yet Another Dairy Farm

Aquila AgrarINVEST Investitions GmbH, D/S Neuseeland Milchfarm Investitions GmbH and Alceda Star SA Germany (100%) received approval to acquire rights or interests in 100% of the units of Kaiwera Limited Partnership which owns or controls a freehold interest in 231 hectares of land at 944 Clement Rd, Kaiwera. The vendor was Oware Trust Limited Maxwell Family, New Zealand (100%); consideration was $5,700,000. The OIO states: “The relevant land is currently used as a dairy farm. The Applicant proposes to increase production through capital investment, sound farming practices and expert management”. See our commentaries for March and December 2010 and March 2011 for details of Aquila’s other farm purchases here

US-Owned Simplot Mops Up Mr Chips

Simplot (Mr Chips) Holdings Pty Limited United States of America (100%) received approval to acquire rights or interests in the remaining 34.3% of the shares of Simplot Mr Chips Limited which owns or controls a freehold interest in 2.6 hectares of land at 100 Kerwyn Avenue, East Tamaki, Auckland. The vendors were Existing Shareholders of Simplot Mr Chips Limited other than Simplot (Mr Chips) Holdings Pty Limited Balle Bros Group Limited, New Zealand (15%), Angelsea Consulting Limited, New Zealand (10%), Trevor Good & Jeanette Good, New Zealand (5%), Sinclair Long Term Holdings Limited, New Zealand (3%), and Jon Davison, New Zealand (1.3%); consideration was $24,393,817.

The OIO states: “The ultimate parent company of the Applicant is JR Simplot Company (JRS). JRS has extensive interests in potato processing, marketing distribution and sales. JRS is one of the world’s largest frozen potato processors with production of more than three billion pounds of french fries and related products. The Applicant was and continues to be a supplier of potato products to JRS’s Australian operations. Under a shareholders’ agreement the New Zealand shareholders in Simplot Mr Chips Limited (Simplot) were granted various put options. Through the put options, the New Zealand Shareholders can require the Applicant to acquire the shares that each of them hold in Simplot. The put options were granted to give the New Zealand shareholders an exit mechanism for their shareholdings and to ensure that the Applicant could acquire the Simplot shares and not have them sold to a person or persons whose interests are not aligned with its own. Bringing Simplot into the JRS Group as a wholly owned subsidiary will only strengthen the support and commitment that JRS has to Simplot”. Here in New Zealand, Simplot is not just into chips. It owns Birds Eye which has recently come under the spotlight for importing Vietnamese basa catfish which a competitor has claimed was farmed in the heavily polluted Mekong Delta. If you regularly eat that kiwi tradition fish & chips, you have probably already eaten this product.

Other April Decisions

Fletcher Concrete and Infrastructure Limited New Zealand Public (66.1%), Australia Public (33.6%), and various overseas persons (0.3%) received approval to acquire a freehold interest in 17.2 hectares of land at 560 Haruru Rd, Wainui, Auckland. The vendor was Bruce Andrew Hellyer New Zealand (100%); consideration was to be advised. The OIO states: “Winstone Aggregates a division of the Applicant, has been operating a quarry on the land since 1973 firstly under a contract agreement with the then Rodney District Council then under a Profit a Prendre (right to take. Ed.) The proposed acquisition by the Applicant will enable it to increase the efficiencies in its quarry operations on the land and ensure long term access to product for the entire life of the quarry”. 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.

Karen Danielle Fraser & Stephen Charles Diggle Stephen Charles Diggle, United Kingdom (except Isle of Man and the Channel Islands) (50%) and Karen Danielle Fraser, Australia (50%) received approval to acquire a freehold interest in 23.3 hectares of land at 139 Simons Rd, Maungatapere, Whangarei. The vendor was AD Jones Trust and JM Jones Trust Alan Dudney and Jacqueline Mary Jones, New Zealand (100%); consideration was $3,162,500. The applicant plans to improve and expand the orchard currently operating from the property.

Robert Jameson Rauch United States of America (100%) received approval to acquire a freehold interest in 20.1 hectares of land at 801 Hurunui Mouth Rd, Domett, Canterbury. The vendor was Edward William Phipps New Zealand (100%); consideration was $632,500. The property adjoins the Manuka Bay Scenic Reserve administered by the Department of Conservation, and Rauch has indicated he will allow permanent public access across his property to this reserve.

Bernard Jean Sabrier Switzerland (100%) received approval to acquire a freehold interest in 20.8 hectares of land being Lot 23 Mataka Station, Northland. The vendor was Strategic Nominees Limited (as mortgagee) New Zealand (100%); consideration was $1,044,500. Sabrier already owns adjoining land.

Pan Pac Forest Products Limited Japan Public (84.6%), United Kingdom Public (5.4%), various overseas persons (5.3%), and United States Public (4.7%) received approval to acquire a freehold interest in 8.7 hectares of land at SHW 2, Bay View, Napier. The vendor was Stanley David Evans New Zealand (100%); consideration was $445,050. The OIO states: “The land is likely, in the medium term, to be used to extend the Applicant’s existing manufacturing premises at Whirinaki located on the adjoining land. In the short term, the Applicant will continue to use the land for rotation cropping”. See our commentaries for July and August 2001, November 2004, August 2005, and January 2006 for details of other land purchases here by Pan Pac.

The final approval for April was Kaingaroa Timberlands President and Fellows of Harvard College, United States of America (60%), Guardians of New Zealand Superannuation (40%), Forest Genetics Limited Kaingaroa Timberlands (51%), Carson Family Trust, New Zealand (34.2%), Phil Wells Family Trust, New Zealand (7.4%), and Juliet Wells Family Trust, New Zealand (7.4%) receiving approval for the acquisition of a leasehold interest in 79.6 hectares of land at 1102 Te Ngae Rd and State Highway 30, Rotorua. The vendor was The Te Ngae Farm Trust New Zealand (100%); consideration was to be advised.

The OIO states: “Kaingaroa Timberlands currently leases approximately 58 hectares of the property from the Te Ngae Farm Trust from which it operates its Te Ngae Nursery. Forest Genetics also leases 3.67 hectares of the property on which it researches and develops genetically superior varieties of radiata pine seedlings. Forest Genetics’ main customer is Kaingaroa Timberlands. Kaingaroa Timberlands and Forest Genetics intend to surrender their current leases, amalgamate and consolidate the existing leased areas with additional area comprising 17.93 hectares which will be leased by Kaingaroa Timberlands. Kaingaroa Timberlands will sublease part of this land to Forest Genetics. The expanded area that will be leased will enable Kaingaroa Timberlands to expand the Te Ngae Nursery. It will also allow Forest Genetics to expand its seedling business”. See our October 2003 commentary for details of Harvard’s original purchase of Kaingaroa Forest.

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