Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – July 2017 Decisions

Solid Energy Sells Mining Land To Bathurst/Talley’s

BT Mining Ltd (Talley’s Group Ltd, NZ 35%; Singapore public 20%; NZ public 14.3%; Republic Investment Management Pte Ltd, Singapore 13%; Australian public 12.4%; Asian Dragon Acquisitions Ltd, Singapore 4.8%; various overseas 0.7%) has consent to acquire approximately 4,338 hectares from Solid Energy (NZ Govt 100%) for $96 million. This comprises:

a freehold or a leasehold interest in approximately 63 hectares at Huntly West;
a freehold interest in approximately 15.4 hectares, a leasehold interest in approximately 130 hectares and a freehold or a leasehold interest in approximately 230.6 hectares at Maramarua;
a freehold interest in approximately 28.3 hectares, a leasehold interest in approximately 9.9 hectares and a freehold or a leasehold interest in approximately 901.7 hectares at Rotowaro;
a freehold interest in approximately 2,349 hectares and a leasehold interest in approximately 0.8774 hectares at Stockton;
a leasehold interest in approximately 378.6 hectares at Tapp Road, Waikokowai; and
a leasehold interest in approximately 230.5 hectares at Waikokowai.

The OIO states that BT Mining is a joint venture between Bathurst Resources Ltd and New Zealand-owned Talley’s Energy Ltd. Bathurst is the second largest coal producer in New Zealand and currently owns the Buller Coal Project on the Denniston Plateau. Development of the Buller Coal Project was suspended in 2016 because of poor conditions in the metallurgical coal market. BT Mining considers that the investment (in particular, the Stockton Plateau assets) will increase the viability of the Buller Coal Project and the likelihood of it proceeding. The benefits to New Zealand include:

increasing the viability of the Buller Coal Project;
advancing the Government’s regional growth programme;
significant New Zealand participation, including via Talley’s Energy Ltd and Bathurst’s New Zealand shareholders; and
providing Solid Energy’s suppliers, customers and employees with certainty and the ability to plan beyond the immediate future.
Bathurst has previously undertaken investments of benefit to New Zealand, including creating or retaining jobs and significant development expenditure.

For Bathurst consents see the OIO Decisions of October 2010, March 2011, July 2012, October and December 2013, May 2016 and June 2017. For Talley’s consents, see September 2000 and October 2013. For background on Bathurst and Talley’s, see the 2016 Roger Award Judges’ Report – they were one of the finalists.

See also the article by Jeanette Fitzsimons, “Westpac Finances Bathurst: Foreign Bank Funds Foreign Coal Miner To Destroy NZ Biodiversity & Global Climate” in Watchdog 134, January 2014, and a three-part article by Dennis Small, ‘Primary Production, Free Trade, Resource Conflict & Corporate Plunder’ in Watchdog 128, 129 and 130.

Australian Private Equity Buys Up NZ Retirement Villages

Vintage Bidco Ltd (Australian public 62.4%; NZ public 19%; Cayman Islands public 19%; various public 8.3%) has consent to acquire 100% of the shares in Heritage Lifecare Ltd, from Harbourside Holdings Ltd (NZ Public 100%) for $115.7 million. The OIO states that Vintage Bidco will be approximately 81% owned by investment funds controlled by Adamantem Capital Management Pty Ltd, a private equity firm based in Australia which invests in mid-market companies in Australia and New Zealand.

Heritage Lifecare Ltd acquires and manages aged care facilities throughout New Zealand and Adamantem Capital is acquiring it to increase its New Zealand holdings. Vintage Bidco and the individuals with control of the investment satisfied the OIO that they have the relevant business experience and acumen, have demonstrated financial commitment to the investment and are of good character.

The NZ Herald (NZH) reported that Heritage Lifecare operates 977 care beds and 312 living units across 19 sites in NZ, with above average occupancy rates, and will use the Australian funds to buy ten of those sites as part of further expansion. It was not disclosed how big a share has been taken in Heritage Lifecare but the Australian company’s managing directors Anthony Kerwick and Angus Stuart will join Heritage Lifecare’s board (NZH, 6/4/17).

Primary Health Clinics

Mercury Medical Holdings Ltd (NZ public 72%; US public 24%; Australian public 4%) has consent to acquire up to 100% of NMH Holdings Ltd from the Nirvana Family Partnership LP (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act. The OIO states that Mercury Medical Holdings is ultimately 100% owned and controlled by Mercury Capital Fund 2, a private equity fund with headquarters in Sydney.

Mercury Fund’s underlying investors are comprised of institutional and high net worth individuals and families across New Zealand (72%), USA (24%) and Australia (4%). This will result in Mercury Medical Holdings acquiring an interest in NMH Holdings Ltd (a holding company of an existing medical business) of approximately 50%. The vendor and Mercury Medical plan to be joint venture partners in the vendor’s existing business, which comprises 37 primary care clinics, mainly located in the Auckland region.

They will work together to expand the business through opening new sites, acquisitions of similar businesses and geographic expansion outside the Auckland market. Mercury Medical Holdings and the individuals with control of the investment have satisfied the OIO that they have the relevant business experience and acumen, have demonstrated financial commitment to the investment, and are of good character.

NBR reports that Nirvana Health started as a one-doctor general practice in Otara and is now NZ’s largest independent primary health care group. Former National Health Minister Tony Rya ll is on NMH’s Board of Directors, alongside Nirvana’s Nahesh Patel and three Mercury directors. The $A300m Mercury Capital Fund 2, raised in 2015, is also investing in NZ commercial printer Blue Star (NBR, 31/8/17).

NZ Lifestyles

FL Hope Ltd (Bei Keen Wong, Singapore 100%) has consent to purchase approximately 246.5 hectares and to lease approximately five hectares, both at 136 Ranganui Road, Kaiwaka, Northland, from Kaitara Farms Ltd (Douglas Ian Donaldson, Lenore Dwight Donaldson and Neil Finlay McNab, Trustees of the Kaitara Farms Trust, NZ 100%; James Douglas Donaldson and Neil Finlay McNab, trustees of the J D Donaldson Trust, NZ 100%; and Douglas Ian Donaldson, Lenore Dwight Donaldson and Neil Finlay McNab as Trustees of the Kaitara Farms Trust, NZ 100%), for $5.75 million.

The OIO states that Bei Keen Wong and her family, who control FL Hope Ltd, intend to migrate to New Zealand and reside here indefinitely. The application states that overseas persons intending to reside in New Zealand indefinitely are not required to show that their investment in sensitive land is likely to benefit New Zealand, as the land will assist new migrants to settle in New Zealand and the benefits will be considered under immigration legislation. See also the OIO Decisions for September 2010; Bei Keen Wong is a director of Goodman Ltd, which purchased 1.1 ha in Richmond Rd, Auckland, site of the Grey Lynn Countdown supermarket.

Ailsa Jane Wilson (Australia 50%) and George Bruce Duncan Wilson (Australia 50%) have consent to acquire approximately five hectares at 473 Kauaeranga Valley Road, Thames from Monika Lange (NZ 100%) for $1,190,000. The applicants have satisfied the OIO that they intend to obtain New Zealand residency and reside in New Zealand indefinitely.

Edgar Henry Bachrach as Trustee of the Edgar H Bachrach Trust (Edgar Henry Bachrach, USA 100%) has consent to acquire approximately 4.0391 hectares of land at 13 Carlin Creek, Lakeside Estates, Queenstown, from C Mulgrew, B Mulgrew and S Dolan (Belinda Margaret Mulgrew, Craig Stephen Mulgrew and Shane Christopher Dolan as trustees of a trust, NZ 50%; and Craig Stephen Mulgrew, Belinda Margaret Mulgrew and Shane Christopher Dolan as trustees of a trust, NZ 50%) for $820,000.

This comprises an 0.4 hectares lifestyle block and a 1/39 interest in a further 3.6 hectares of common land within a residential subdivision. The OIO states that Bachrach intends to build a holiday house on the land, and will undertake a planting and a pest control programme and support to Wakatipu Search and Rescue.

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