August 2006 decisionsGE buys the mortgage portfolio of St George Bank (“Superbank”) First Data Corporation of the U.S.A. has approval to take over Peace Software Otamatapaio owners freehold 5,600 ha. of station for $1 from tenure review… … then local partners in Otamatapaio and other stations sell to Italian partners Bunnings buys land in Paraparaumu for new store Trustpower buys further land for Arnold Valley power scheme Kupe buys Taranaki land for gas production plant Two lots on Lake Wakatipu, Queenstown, bought for resale
GE buys the mortgage portfolio of St George Bank (“Superbank”)GE Custodians as trustee of the GE NZ Warehouse Fund #2, owned in the U.S.A. by GE Pan Pacific Holdings LLC, has approval to acquire a mortgage portfolio from St George Bank New Zealand Limited, for an amount “estimated to be approximately $500,000,000 subject to final determination between the parties”. St George Bank New Zealand Limited is owned in Australia by St George Bank Limited.
St George, trading under the “Superbank” name, attempted to provide a banking service in conjunction with Foodstuffs’ supermarkets. It was in the same market that government owned Kiwibank had very successfully entered at about the same time, and it appears to have lost the competition.
The OIO states:
St George Bank Limited, a shareholder of St George Bank New Zealand, has undergone a full review process in respect of its New Zealand operations in conjunction with the Foodstuffs companies who are its joint venture partners in St George New Zealand Limited which trades under the name of Superbank. Following this review it has been decided that St George Bank New Zealand Limited should exit the residential lending market in New Zealand, and commence a sale process in respect of its loan portfolio. The Applicant as trustee of the GE NZ Warehouse Fund #2 (the Trust) proposes to acquire the mortgage portfolio.
The Trustee, the Manager, the Beneficiary and the Settlor are indirect wholly owned subsidiaries of the United States of America conglomerate General Electric Company (General Electric). The Trust is part of the consumer finance division of General Electric which operates internationally though six business units, GE Infrastructure, GE Industrial, GE Commercial Financial Services, NBC Universal, GE Healthcare, and GE Consumer Finance.
GE Consumer Finance has initiated the proposed acquisition of the mortgage portfolio because the acquisition will increase its customer base and permit GE Consumer Finance to compete more effectively against other financial institutions.
[Decision number 200620021.] First Data Corporation of the U.S.A. has approval to take over Peace SoftwareFirst Data New Zealand Limited, owned in the U.S.A. by First Data Corporation, has approval to acquire the business assets and undertakings of Peace Software International Limited for $114,989,156 from existing shareholders in Peace Software International Limited, which was owned 60% in Aotearoa, and 40% in the U.S.A.
Insight Capital Partners II LP and Arete Ventures LLC through its subsidiary, Utility Competitive Advantage LLC were given approval to take a 41% shareholding in Peace Software in January 2003. See our commentary for that month for further details. This completes the overseas takeover of the company.
The OIO states:
First Data New Zealand Limited (FDNZ), a wholly owned subsidiary of First Data Corporation (First Data) proposes to acquire the business of Peace Software International Limited (Peace) by way of an amalgamation under Part XIII of the Companies Act 1993. Peace operates a business in New Zealand and elsewhere focused on development and servicing of utility billing and payment software.
First Data is an electronic commerce and payment processing company based in the United States of America and is listed on the New York Stock Exchange. In New Zealand First Data operates through subsidiaries TeleCheck Payment Systems Limited, Western Union Financial Services Australia Pty Limited, Paysys International Pty Limited and Western Union Network (Ireland) Limited. The proposed transaction will allow First Data to expand its geographic and customer base particularly in the public utilities industry.
[Decision number 200620025.] Otamatapaio owners freehold 5,600 ha. of station for $1 from tenure review…In a retrospective decision, apparently approving an acquisition made in 2005, Otamatapaio Station (1993) Limited, owned 34% in Italy by Luigi, Georgio and Roberto Botto Poala, 33% in Australia by Michael Raoul Lempriere and family, and 33% in Aotearoa by John Perriam and Heather Perriam, has approval to acquire 5,568 hectares of freehold at Otamatapaio Station, Otago for $1 from The Crown. The land includes or adjoins land “held for conservation purposes…, a reserve, a public park, or other sensitive area, … a lake the bed of which exceeds 8 hectares in area”.
It appears that there is no coordination between the OIO and the Commissioner of Crown Lands to ensure that freeholding of high country lands has prior OIO approval.
The original acquisition of the 9,110 hectare Otamatapaio Station, made up of 1,193 hectares freehold and 7,917 hectares leasehold was approved by the OIC in September 1993. Since then, the owners have received approval to purchase the 12,684 hectare Rugged Ridges Station at Kurow Road, Otamatata, Otago, all of which is pastoral lease, in April 1999, and the Holbrook, Rollesby and Glenrock Stations, Burkes Pass, South Canterbury (358 hectares of freehold and 13,699 hectares of pastoral lease) in September 2001. See our commentary for those months for further details.
According to the OIO,
On 31 August 1993 consent was granted to the Applicant to acquire Otamatapaio Station comprising approximately 8,000 hectares of Crown Pastoral Lease land and approximately 1,163 hectares of freehold land. In 2004 the Applicant entered into a substantive proposal with the Commissioner of Crown Lands in accordance with the Tenure Review process under Part 2 of the Crown Pastoral Land Act 1998. As a result approximately 2,356 hectares of Otamatapaio Station being part of the Crown Pastoral Lease land was restored to full Crown ownership and a fee simple title was issued on 5 August 2005 to the Applicant for the land the subject of this application.
The Applicant advises the freeholding has enabled it to use the optimum and productive parts of Otamatapaio Station for farming. The Applicant also advises that the tenure review process has also enabled greater public access to rivers and lakes adjoining the subject land and has protected species of fauna and flora by the creation of the conservation area and reserves on the land returned to full crown ownership.
The freeholding of the subject land as a result of the Tenure Revue process will ensure that the Applicant can continue to provide and further enhance the benefits that have accrued since it acquired the Crown Pastoral Lease in 1993. Such benefits include: (a) the creation of new job opportunities in New Zealand; (b) increased productivity from the property; and (c) the introduction into New Zealand of development investment for development purposes.
In addition the return to Crown ownership of approximately 2,356 hectares under the Tenure Review process will enable greater public access to rivers and lakes adjoining the property and the protection of species of fauna and flora by the creation of conservation areas and reserves on land returned to the Crown.” [Decision number 200620032.] … then local partners in Otamatapaio and other stations sell to Italian partnersIn three decisions, the New Zealand partners in Otamatapaio, and in one case the Australian partners too, sell their shares in these large stations to the company owned by the Italian partners, Reda International. These stations have thus become 100% overseas owned. Presumably the application to the OIO for these sales uncovered the unapproved tenure review freeholding reported above.
Reda International S.A., owned in Italy by Luigi, Georgio and Roberto Botto Poala, has approval to acquire “rights and interests in”: · up to 66.67% of Otamatapaio Station (1993) Limited, including 6,732 hectares of freehold at Otamatapaio Station, Benmore, Otago for $3,820,154 from John Charles Perriam and Heather Lorna Perriam of Aotearoa [Decision number 200620033]; · up to 66.67% of Rugged Ridges Limited, including 9,591 hectares of Pastoral Lease at Rugged Ridges Station, Benmore, Otago for $686,683 from John Charles Perriam and Heather Lorna Perriam of Aotearoa [Decision number 200620034]; and · up to 100% of Glenrock Station Limited, including 358 hectares of freehold and 13,700 hectares of Pastoral Lease at Glenrock Station, Tekapo, Canterbury for $2,690,126 from existing shareholders in Glenrock Station Limited: 50% from Michael Raoul Lempriere and family of Australia and 50% from John Charles Perriam and Heather Lorna Perriam of Aotearoa [Decision number 200620035].
It appears that some of the Rugged Ridges station has been sold since purchase in 1999.
According to the OIO in each case,
The shares in Otamatapaio Station (1993) Limited (Otamatapaio), Rugged Ridges Limited (Rugged Ridges), and Glenrock Station Limited (Glenrock) are currently held, as to one-third each, by Reda International SA (Reda), Lempriere (New Zealand) Limited (Lempriere), and Mr and Mrs JC Perriam (Perriam).
Otamatapaio was incorporated on 18 March 1992 and purchased approximately 8,000 hectares of leasehold land and approximately 1,150 hectares of freehold land. Rugged Ridges was incorporated on 5 November 1997 and purchased approximately 12,683 hectares of leasehold land. Glenrock was incorporated on 8 October 2001 and purchased approximately 14,000 hectares of mainly leasehold land.
The Perriam’s now wish to retire from this partnership, and it is proposed that Reda will acquire the Perriam’s shareholding in Otamatapaio, Rugged Ridges, and Glenrock. In addition, Lempriere wishes to sell its interest in Glenrock to Reda. Bunnings buys land in Paraparaumu for new storeBunnings Limited, owned in Australia, has approval to acquire 4.1 hectares at 20 Milne Drive, Paraparaumu, Wellington for a suppressed amount from Golftech Limited, owned 57% by Alan James Currie, 29% by Janice Helen Swainson and Reginald Harold Swainson, and 14% by Philip Wong, all of Aotearoa. The land includes or adjoins “a reserve, a public park, or other sensitive area”, and a “scientific, scenic, historic, or nature reserve”.
According to the OIO,
Bunnings Limited is one of New Zealand’s major suppliers of home and garden improvement products, and building materials and services to retail and trade customers. Bunnings operates a network of hardware stores throughout New Zealand, trading under the brand names Benchmark Building Supplies and Bunnings Warehouse. Bunnings proposes to acquire the subject land to construct a Bunnings Warehouse store as part of its expansion programme.
[Decision number 200620022.] Trustpower buys further land for Arnold Valley power schemeTrustPower Limited, owned 23.77% in the U.S.A. by Alliant Energy Corporation, and 35.18% by Infratil Limited, 28.56% by Tauranga Energy Consumers Trust, and 12.49% by minority shareholders, all of Aotearoa, has approval to acquire 17 hectares at Kaimata, Grey District, West Coast for a suppressed amount from Harry Speirs of the U.K.
According to the OIO,
The Applicant (TrustPower) proposes to acquire the subject land as part of the development of the Arnold Valley Hydro-electric Power Scheme (Arnold Valley Scheme), which will comprise a new intake dam, canal, flumes, head pond, regulation pond, and a power station, situated at the Arnold River on the West Coast of the South Island. TrustPower currently owns and operates an existing hydro-electric power station on the Arnold River, which will be decommissioned and demolished following construction of the Arnold Valley Scheme.
The subject property is integral to the Arnold Valley Scheme with one of the canals required for the Arnold Valley Scheme to be built through the land.
Following the acquisition of the land TrustPower proposes to rent out the dwelling located on the land as a lifestyle property until construction of the Arnold Valley Scheme commences which could be in up to 7 years time. Following construction of the scheme it is likely that the portion of the subject property not required as part of the scheme will be on sold.
TrustPower also had acquisition of land for the scheme approved in April, May and June this year. See our commentary for those months for further details. [Decision number 200620030.] Kupe buys Taranaki land for gas production plantKupe Joint Venture, owned 45.05% in Australia, 4% in Japan by Mitsui & Co. Limited, 2.275% in the U.S.A., 1.45% in the U.K., 1.225% by “Unknown Overseas Persons”, 31% in Aotearoa by Genesis Power Limited, and 15% in Aotearoa by minority shareholders, has approval to acquire 124 hectares at Inaha Road, RD11, Hawera, Taranaki, for $6,815,375 from Wayne Ernest Scott and Glenda May Scott (93 hectares) and from Edward Michael Bourke (31 hectares) all of Aotearoa.
According to the OIO,
The Kupe Joint Venture was formed to carry out exploration for, and development and production of, petroleum within the area specified by PML 38146 which includes the Kupe gas field, situated 30 kilometres off the South Taranaki coast. Development and production is now the primary focus of the Kupe Joint Venture. The development is known as the Kupe Gas Project.
New Zealand’s demand for gas has been met primarily by the Maui gas field for the past 25 years. The Kupe field was discovered in 1986 but has remained undeveloped largely due to the abundant gas flowing from Maui making the development of Kupe uneconomic. However, with the redetermination of the Maui gas reserves and the rapid increase in domestic gas demand for electricity generation, the development of the gas field is now both economical and vital in meeting New Zealand’s energy needs.
The Kupe Joint Venture proposes to acquire the subject land to conduct and operate a gas production station to convert the petroleum recovered from the Kupe gas field into its usable forms - natural gas, condensate and liquefied petroleum gas (LPG).
The proposed investment involves the acquisition of 30.6549 hectares from Edward Michael Bourke (Bourke) and the acquisition of 93.0778 hectares from Wayne Ernest and Glenda May Scott (Scott). The Production Station requires approximately 20 hectares of land and is to be constructed on the land acquired from Bourke. The Kupe Joint Venture is proposing to on-sell the Scott land to Bourke to enable Mr Bourke to continue his dairy farming business.
[Decision number 200620036.] Land for wine· Craggy Range Vineyards Limited, owned 95% in Australia by Terrence Elmore Peabody, and 5% in Aotearoa by Stephen Mark Smith and Laura Bridget Cunningham Smith, has approval to acquire 9 hectares of leasehold at Brightwater, Nelson for $469,311 from Tohora Ma Limited of Aotearoa. The OIO states: “Pursuant to an Agreement to Lease executed in July 2005, the Applicant, Craggy Range Vineyards Limited (CRV) proposes to take a lease over the subject property for an initial term of 10 years with one right of renewal of five years. The land has been developed as a Sauvignon Blanc vineyard by the land owner. The proposal will provide CRV with a secure grape supply which will assist CRV to increase its Sauvignon Blanc grape supply from 200 tonnes at present to 625 tonnes by 2009 to enable it to satisfy export demand.” [Decision number 200620031.] · Nobilo Wine Group Limited, owned in the U.S.A. by Constellation International Holdings Limited, has approval to acquire 59 hectares of leasehold at 128 Dicks Road, Spring Creek, Marlborough for $2,851,727 from M E Dick Limited, owned 54.82% by Peter Allan Dick, 45% by Malcolm Edward Dick, and 0.18% by Karen Gates Dick, all of Aotearoa. The OIO states: “Nobilo Wine Group Limited carries out a fully integrated viticulture business, which includes the growing and development of grapes, and the manufacture, importation, distribution and sale of red and white wine within New Zealand and, increasingly, for export markets. Nobilo advises that export growth has been constrained by grape supply. Nobilo proposes to secure additional grape supply and increased processing capacity. Nobilo currently has a variety of interests in New Zealand, including land utilised for the growing of grapes, and as wineries and production sites. In total it either owns or leases approximately 790 hectares of vineyards, in New Zealand predominantly in the Hawkes Bay, Marlborough and Auckland regions. Nobilo also sources grapes from contract growers from around 1,400 hectares in area. Nobilo proposes to enter into a partnership with the existing owner of the subject land under which the partnership will lease the subject land to undertake a viticultural development. Nobilo advises that the property has a total of approximately 98 plantable hectares which will be planted in Sauvignon Blanc vines. The proposed acquisition will provide Nobilo with an increase in grape supply which will allow it to continue to develop its export wine markets and enhance the reputation of New Zealand wine overseas. This is likely to result in significant increases in employment, processing of grapes and export levels.” [Decision number 200620027.] · Pernod Ricard New Zealand Limited, owned in the U.K. by Allied Domecq Plc, has approval to acquire 9 hectares at Conders Bend Road, State Highway 6, Renwick, Marlborough for $2,531,250 from Rex Robert Brooke-Taylor and Paula Karen Brooke-Taylor of Aotearoa. In April 2004, Pernod Ricard New Zealand bought Framingham Wine Company from its shareholders who included the Brooke-Taylors. The purchases included land at Condor’s Bend Road. See our commentary for that month for further details. In the present transaction, according to the OIO, “The Applicant’s principal operations in New Zealand are the growing of grapes, production of wine, buying wine and the wholesaling and retailing of wine and other beverages in New Zealand and overseas. The Applicant is the largest participant in the New Zealand domestic wine business and future growth opportunities are limited. The Applicant has identified the acquisition of further vineyards or land for development for the growing of grapes as a way of being able to compete more effectively in the national and international wine markets. The proposed purchase will provide the Applicant with an increased grape supply which will enable it to continue to develop its export wine markets and enhance the reputation of New Zealand wine overseas. The ongoing development is likely to result in the introduction of development capital, increase in employment, processing of grapes and export volumes. The Applicant proposes to acquire the subject land which contains 6.44 hectares of planted vineyard. The land is currently leased by a wholly-owned subsidiary of the Applicant for viticultural purposes.” [Decision number 200620026.] New owners for Otahuna LodgeTimothy Hall Cannon and Miles Permenter Refo of the U.S.A. have approval to acquire 12 hectares at Rhodes Road, Tai Tapu, Canterbury for a suppressed amount from Contributory Mortgage Nominees Limited of Aotearoa. The land is or includes “a historic place, historic area, wahi tapu, or wahi tapu area” and “land subject to a heritage order, or a requirement for a heritage order”.
This lodge hit the headlines when its British owners (who received OIC approval to acquire it in March 2003 – see our commentary for that month for further details) very publicly went broke and the operation was put into receivership. For further details see our commentary for July 2005 and the reference there. It is to be hoped that the OIO has done a better job of screening the applicants than was done in 2003.
The OIO states:
The Applicants propose to acquire the land which contains Otahuna Lodge, which operates as a luxury lodge providing superior accommodation, food and beverages, and an events venue. The Applicants intend to operate and further develop a viable and successful hospitality business.
The Applicants intend to reside in New Zealand indefinitely upon the acquisition of the Lodge. The Applicants have lodged an Expression of Interest for New Zealand permanent residency under the Skilled Migrant category.
[Decision number 200620023.] Two lots on Lake Wakatipu, Queenstown, bought for resaleH Investments (NZ) Limited, owned 71.4157% in Australia by Sadie Mary Hayson, and 14.2971% each by John Terrence Hayson and David Hayson, all of Australia, has approval to acquire 1.2 hectares at Lakeside Estates, State Highway 6, Queenstown, Otago for $1,000,000 from Carlin Enterprises Limited, owned in Aotearoa by Kevin David Carlin. The land includes or adjoins land “held for conservation purposes” and “a reserve, a public park, or other sensitive area”.
According to the OIO,
In 2005, the Applicant entered into negotiations with Carlin Enterprises Limited (Carlin) to acquire Carlin’s property development business. As a result of those negotiations the Applicant acquired, in August 2005, the business assets and unsold land held by Carlin, being 103 unsold freehold sections in the Styx Mill Development in Christchurch, 41 unsold villa sites at Styx Mill, and the title to office premises used by the business in Christchurch. The acquisition of these assets did not require consent as property was not ‘land’ as defined in the Overseas Investment Act 2005.
The Applicant also entered into a second agreement with Carlin to acquire the subject land, which comprises two vacant lots in the approximately 43 lot residential subdivision known as ‘Lakeside Estates’ situated between Queenstown and Kingston near the shore of Lake Wakatipu. The subdivision was undertaken by Carlin and has been sold down over the last eight years. The two lots are the only lots in the subdivision that remain unsold. The Applicant advises that it proposes to on sell the lots as vacant lots.
The proposal to acquire the subject land is part of the assets forming part of Carlin’s property development business.
[Decision number 200620024.] Summary statisticsAll investments Unusually, the value of investment approved in the year to August 2006 is lower than for the previous August year, but the net value (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) is three times higher. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
*In addition there was one retrospective approval granted during the month. This involved a gross consideration of $1 (land area 5,568 hectares) and a net investment of $1 (land area 3,730 hectares).
Investment involving land Both gross and net sales of land approved by the OIO during the years to August have increased in area. Refusals (above) have risen in number, area and value, but are still a tiny proportion of the total.
*In addition there was one retrospective approval granted during the month. This involved a gross land area of 5,568 hectares (consideration $1) and a net land area of 3,730 hectares (consideration $1).
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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