March 2007 decisions

Bernero Holdings Limited, owned in the U.S.A. by Adam Gino Bernero has been refused approval to acquire 8 hectares on the corner of State Highway No 6 and McMillan Road, Garston, Otago for $649,587 from Danson Holdings Limited, owned in the U.S.A. by Deborah Ruth Danson and Forrest Melville Danson.

According to the OIO,

The Applicant proposes to acquire the land which contains the business known as “Upper Mataura Angler’s Lodge”. The Applicant’s shareholder is an expert fly fisherman who proposes to utilise his North American contacts to further develop the fishing/accommodation business operated from the land. The land is situated near the renowned fly fishing river, the Mataura River and in close vicinity of other rivers.

The application for consent has been declined as the Overseas Investment Office was not satisfied that all of the criteria in section 16 of the Overseas Investment Act 2005 have been met. The Overseas Investment Office was not satisfied that the proposal will or is likely to result in substantial and identifiable benefits to New Zealand, or any part of it or group of New Zealanders.

[Decision number 200710002.]

Allco takes remaining 50% of Strategic Finance and restructures ownership …

Allco HIT Limited, owned 37.79% by Allco Finance Group Limited, 37.41% by Allco Principals Trust, 20.05% by minority shareholders, all of Australia, and 4.75% by minority shareholders in Aotearoa, has approval to acquire Strategic Investment Group Limited (SIGL), Auckland for $225,000,000. It was owned 40.835% in Australia by Allco Principals Property Pty Limited, 9.165% in Australia by Allco Funds Management Limited, and 50% in Aotearoa.

According to the OIO,

Allco Principals Trust (APT) is a registered managed investment scheme managed by a subsidiary of Allco Finance Group Limited. APT acquired a 50% indirect stake in SIGL which is largely held by Allco Principals Property Pty Limited, a wholly-owned subsidiary of APT. This proved to be a successful investment for APT.

The applicant is a newly incorporated company and is presently owned 100% by Allco Hybrid Investment Trust (Allco HIT). Allco HIT has decided to restructure its business as part of a broader strategy to expand and build a diversified range in lending products and to therefore acquire 50% ownership of SIGL from APT. Under the restructure Allco HIT has proposed an agreement with the holders of the remaining 50% of the shares in SIGL to purchase those shares. The acquisitions would provide the applicant with ownership of, access to, and relationships with, a significant commercial customer base. Following the acquisition the applicant will look to acquire and integrate additional finance businesses with the objective of further diversifying and enhancing its product suite.

Allco acquired its first 50% of Strategic Finance in March 2006. The OIO approval in that case was for purchase of 100% of the company, but Allco only took up 50%. The purchase price was suppressed, but from the statistics supplied, we were able to estimate that it was $356,700,000. It is therefore paying considerably less for the second half of the shareholding in the company, perhaps reflecting its degree of control of the company. (See our commentary for March 2006 for further details.)

[Decision number 200710017.]

… and had approval to take over Jetconnect for $148m if consortium got Qantas

Airline Partners Australia Limited, owned 35.04% by Allco Equity Partners Limited, 11.07% by Allco Finance Group Limited and 14.93% by Macquarie Bank Limited, all of Australia; 22.84% by TPG Partners V, LP, and 7.12% by Newbridge Asia IV, LP, both of the U.S.A.; and 9% in Canada by Onex Partners II LP, gained approval to “indirectly acquire” Jetconnect Limited for $148,390,166 from Qantas Airways Limited, owned 61.84% in Australia, 28.52% in the U.S.A., 5.18% in the U.K., and 4.46% by “various overseas persons”.

“This will be a consequence of the Applicant’s acquisition of up to 100% of Qantas Airways Limited in Australia” said the OIO. In fact, the takeover bid for Australia’s national airline failed in May 2007.

According to the OIO,

Airline Partners Australia Limited (Airline Partners) is an Australian incorporated company controlled by a consortium of experienced investors all of which, or their controlling entity, have longstanding associations with the airline industry. The consortium comprises Allco Equity Partners Limited, Allco Finance Group Limited, Macquarie Bank Limited, TPG Partners V, LP, Newbridge Asia IV, LP and Onex Partners II LP.

Airline Partners proposes to acquire 100% of the issued capital of Qantas Airways Limited (Qantas), an Australian incorporated company listed on the Australian Stock Exchange through a Board recommended cash takeover under the Corporations Act 2001. Qantas is Australia’s largest domestic and international airline. Qantas is registered in New Zealand as an overseas company and undertakes business activities in New Zealand. Qantas owns 100% of the shares in Jetconnect Limited (Jetconnect). Jetconnect is the holder of a New Zealand Air Operator’s Certificate and owns 100% of Qantas Investments (NZ) Limited (QINZL). QINZL holds approximately 4.2% of the shares in Air New Zealand Limited.

Airline Partners intends to support Qantas in the execution of its existing strategy including growing both the domestic and international business.

Qantas sold its shares in Air New Zealand in June 2007 (Sydney Morning Herald, “Qantas sells Air New Zealand stake”, 27/6/2007, http://www.smh.com.au/news/business/qantas-sells-air-new-zealand-stake/2007/06/27/1182623950353.html).

[Decision number 200710019.]

CCMP private equity fund acquires Repco

CCMP Acquisition Co Pty Limited of Australia has approval to acquire Repco Corporation Limited for $117,000,000 from its existing shareholders, 53.71% in Australia, 14.36% in the U.S.A., and 31.93% in “various” other overseas countries.

The OIO states:

The CCMP Funds have undertaken high profile and complex transactions throughout the Asia Pacific in the automotive parts industry and have gained extensive experience from these activities. The CCMP AOF II Funds have access to highly experienced directors and will ensure that the Applicant is able to provide high level strategic advice and access to capital resources which CCMP Capital believes will enable Repco to successfully implement management’s strategies.

The Applicant’s strategy for Repco is, as is typical for CCMP Capital investments, to operate the business substantially as it has been operated to date but to support management’s plans for growth and operational improvements. CCMP Capital will back management teams to execute their business plans by providing a degree of autonomy with respect to the strategy and operations of the Repco Corporation, supported by access to highly experienced directors, strategic advice and access to capital resources.

Repco describes itself on its website http://www.repcocorp.com.au as “Australia and New Zealand’s largest reseller and supplier in the automotive parts and accessories aftermarket” with over 430 stores and 4,000 staff. CCMP was formerly part of J.P. Morgan Chase and Company’s private equity business.

[Decision number 200710033.]

Contact Energy buys Origin Energy Industries from its dominant shareholder

Contact Energy Limited has approval to acquire Origin Energy Industries Limited, Wellington for $156,000,000 from Origin Energy Limited.

Origin Energy Industries’ key business is LPG supplier, Rockgas. It is the biggest LPG supplier in Aotearoa, with about 50% of the market. Origin owned Rockgas 50/50 with Caltex until it bought Caltex out it in March 2004 for $17.6 million. That put a value on Rockgas in 2004 of $35 million for the whole company – about 20% of the price it was sold for in this transaction, but that much lower price “probably included debt” according to Contact.

According to the OIO, Contact is owned 52.11% in Australia, 3.53% in the U.K., 2.45% in the U.S.A., 4.78% in various other countries, and 37.13% in Aotearoa. What it does not state, and more to the point is that it is 51.4% owned by Origin Energy Ltd of Australia. The sale therefore raised concerns that as a sale between related parties, the price may have been unfair to Contact’s minority shareholders, though Contact’s independent directors had commissioned an independent report from PricewaterhouseCoopers which concluded the price was fair. (Press, “Contact secures Rockgas”, by Marta Steeman, 7/3/2007, p.C2; New Zealand Herald, “Price for Rockgas ‘fair’ says Contact”, by Adam Bennett, 7/3/07.)

Origin Energy is owned 90.1% in Australia, 4.55% in the U.S.A., 2.9% in the U.K., and 2.45% in various countries other than Aotearoa.

According to the OIO,

Contact Energy Limited is a well known entity whose strategy involves pursuing new opportunities to grow its business and to firmly establish itself as New Zealand’s leading energy company. The acquisition will enable the Applicant to diversify its business and offer a broader suite of products and energy services to current and potential customers. Through its strong retail base and existing energy products, the Applicant will also provide the Rockgas business with enhanced growth and development opportunities.

[Decision number 200710023.]

Fletcher Concrete acquires Waiheke Readymix including land on Waiheke Island

Fletcher Concrete and Infrastructure Limited, owned 34% in Australia, 13% in the U.S.A., 11% by “Unknown Overseas Persons” from “various” other countries, and 42% in Aotearoa, has approval to acquire 0.46 hectares of leasehold at 102 Ostend Road, Waiheke Island, Auckland for a suppressed amount from Waiheke Readymix Limited of Aotearoa.

In fact this is part of a takeover of Waiheke Readymix’s entire operation. According to the OIO,

Fletcher Concrete and Infrastructure Limited through its operating division Firth Industries, proposes to acquire the business and assets of Waiheke Readymix Limited, a company manufacturing readymix on Waiheke Island. Firth Industries business activities include readymix concrete and concrete products. The acquisition of the business and assets of Waiheke Readymix Limited is part of the Applicant’s strategy to increase its presence in the readymix concrete market in the Auckland region.

The OIO states that the land, “either alone or together with any associated land of that type … is or includes land on an island; and adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area”.

[Decision number 200710028.]

Feltex properties sold to Godfrey Hirst chief, Rudyard (“Kim”) McKendrick

Kakariki Equities Limited and Foxton Equities Limited, owned by Rudyard Grant McKendrick of Aotearoa, have approval to acquire 43 hectares comprising 7 hectares at Lady's Mile and Duncan Street, Foxton and 35 hectares at Kakariki Road, Marton, Manawatu, for $5,861,508 from Feltex Carpets Limited, owned 97.8% in Aotearoa and 2.2% by “various overseas persons”.

The OIO states:

Godfrey Hirst NZ Limited (GHNZ) has entered into an agreement to acquire the business operations and certain assets of Feltex Carpets Limited (Feltex) from receivers appointed by ANZ National Bank Limited (ANZ). GHNZ is a vertically integrated carpet manufacturing and wool processing company with operations in both the North and South Islands of New Zealand. The Godfrey Hirst group primarily produces woollen carpets for the residential and commercial sectors of the flooring market in New Zealand and for export.

The Applicants propose to acquire the properties owned by Feltex at Kakariki Road, Marton and Lady's Mile and Duncan Street, Foxton. The Applicants' intention is to close the Kakariki Road site. Kakariki Equities Limited (one of the Applicants) is in the process of finalising an agreement to sell the Kakariki Road site to Kakariki Industrial Park Limited (a consortium involving Turks Poultry Farm, Whaitiri Potato Company Limited and a local farmer).

Feltex's Kakariki scouring plant was closed by Godfrey Hirst with the loss of 44 jobs. Kakariki is 10km south-east of Marton. The Foxton plant manufacturing tufted carpet was not closed. (NZPA, “Feltex put into receivership”, 22/9/06; New Zealand Herald, “Feltex deal leaves staff out of pocket”, by Richard Inder and James Ihaka, 4/10/06.)

The decision sheet does not make clear why this purchase, apparently by a New Zealand entity, requires OIO approval. The OIO does not mention that Rudyard Grant (known as “Kim”) McKendrick is the chairman and chief executive of Godfrey Hirst Australia, and also a principal shareholder of the McKendrick family-owned Australian and New Zealand companies. He lives, according to the official Companies Office record, in Newton, Victoria, Australia but is a New Zealander according to press reports. (New Zealand Herald, “Hirst takes bigger share of carpet rival Feltex”, by Georgina Bond, 13/1/06, http://www.nzherald.co.nz/topic/story.cfm?c_id=257&objectid=10363468; “Brothers seek quick decision on Feltex”, by Richard Inder, 9/8/06, http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10395269&pnum=0.) CAFCA put the question to the OIO, which replied (3 August 2007):

Rudyard McKendrick was born in New Zealand and accordingly is a New Zealand citizen. The two applicant companies, Kakariki Equities Limited (Kakariki) and Foxton Equities Limited (Foxton), are New Zealand registered companies. Kakariki and Foxton however are special purpose vehicles which were established by Godfrey Hirst New Zealand Limited (GHNZ) for the investment in the properties located at Kakariki and Foxton. The Applicants are consequently “associates” of GHNZ pursuant to section 8(l)(c) of the Overseas Investment Act 2005 (the Act), as they acted jointly and in concert with GHNZ for the purposes of the acquisition. GHNZ is an “overseas person” as defined in section 7 of the Act. GHNZ is an overseas person as its ultimate parent company is registered in Vanuatu, even though the shares in that holding company are ultimately held by Mr McKendrick.

CAFCA also asked the OIO why GHNZ did not require an OIO consent for its takeover of Feltex. The OIO replied that

GHNZ did not require consent to invest in Feltex Carpets Limited for the following reasons:

(i) the property which was being acquired as part of the Feltex acquisition, as distinct from the Properties acquired by Kakariki and Foxton, did not include any land which is sensitive under the Act; and

(ii) the value of the New Zealand assets which were acquired as part of the Feltex acquisition was below the $100 million threshold set out in the Act.

That the New Zealand assets of Feltex (other than the properties in the present decision) were sold for less than $100 million has not previously beeen released to the public.

The two companies of which McKendrick is the sole shareholder, Kakariki Equities Limited and Foxton Equities Limited, were first incorporated on 7 September 2006 according to their official Companies Office records. Godfrey Hirst had been negotiating until days before that to take over an increasingly desperate Feltex, but cut off talks on 6 September because it “was not interested in a bidding war with Craig and Graeme Turner, the Sleepyhead owners” who had a plan they were about to present to the Feltex board. In fact Godfrey Hirst never lost interest, and may have continued talking to Feltex's bank, ANZ. By 20 September it was publicly reported that Godfrey Hirst was back negotiating with ANZ. On 22 September the bank announced it had dismissed the Turner proposal and put Feltex into receivership. Godfrey Hirst made an official bid for the assets and business of Feltex to the Receivers on 29 September which was accepted on 3 October. Settlement of the sale was on 30 November. (Dominion Post, “Feltex investors told to sell or sue as woes mount”, by Gareth Vaughan, 7/9/06; Dominion Post, “Hirst back in Feltex frame”, by Gareth Vaughan, 20/9/06; “ANZ bank intends to appoint receivers”, Feltex Stock Exchange Announcement, 22/9/06; Press Release and NZX announcement, 29/9/06, Receivership update, Feltex Carpets Limited (In Receivership); Press Release and NZX Annoucement, 3/10/06 Receivership update, Feltex Carpets Limited (Receivers and Managers Appointed); Receivers' 1st Report on the State of Affairs of Feltex Carpets Ltd (In Receivership), 27/11/06; Receivers' [6 Monthly] Report on the State of Affairs of EXFTX LTD Feltex Carpets Ltd (In Receivership) (In Liquidation) which previously traded as Feltex Carpets Ltd, 30/4/07)

It is therefore likely that the two companies, Kakariki Equities Limited and Foxton Equities Limited, were created with a specific purpose in mind. In the case of the Kakariki plant, the plan seems to have been for McKendrick to purchase it with the aim of a quick resale. The buyer, Kakariki Industrial Park Ltd (which appears to be independent of McKendrick and Godfrey Hirst), was itself registered only on 15 December 2006. If there was a profit on the resale (which seems likely), then Feltex's creditors and shareholders, many already unhappy at the way the sale and liquidation were conducted, have missed out on it. If that is the case, it is remarkable that Kim McKendrick has apparently personally pocketed the profit rather than either the creditors of Feltex or his family company, Godfrey Hirst. It would be interesting to know what he has in mind for the Foxton property. Of further interest would be the price McKendrick paid to ANZ for those properties as well as the price obtained from the subsequent re-sale.

Neither is the OIO's description of Feltex Carpets Ltd as 97.8% New Zealand owned apparently consistent with its Companies Office record. The official record shows it is 100% owned by Godfrey Hirst NZ Ltd (and its two directors are McKendrick and Godfrey Hirst NZ Ltd General Manager and Director, Tania Pauling), which in turn is owned by Avon Pacific Holdings Ltd, with three directors in common with Godfrey Hirst NZ Ltd including McKendrick and Pauling, but 100% owned by a Vanuatu company Olympic Pacific Ltd whose address is KPMG House, Port Vila. A possible reason for this would be tax avoidance, but there could be others. We can only conclude that Olympic Pacific is 97.8% owned in New Zealand. The August 2006 Godfrey Hirst application to the Commerce Commission to take over Feltex says that Olympic Pacific is 100% owned by “McKendrick Family interests” – at least some of whom are Australian resident (p.24). (Note that there are actually two different Feltex Carpets Ltd. The first one was put into receivership and then liquidated. A condition of Godfrey Hirst's acquisition of its assets and business was that it be renamed. It is now known by the memorable title of “EXFTX Limited (In Receivership)(In Liquidation)”. A new Feltex Carpets Limited was registered at the Companies Office on 22 February 2007, and since this OIO decision occurred in March 2007 we assume that it is this second Feltex Carpets Ltd that is the one referred to.) Again, CAFCA put the question to the OIO, which replied that despite the date of the decision, it referred to the former Feltex Carpets Ltd (now EXFTX) , not the one on the Company Office records at the time of the decision.

The land involved “either alone or together with any associated land … adjoins land over 0.4 hectares that includes a historic place, historic area, wahi tapu, or wahi tapu area that is registered or for which there is an application or proposal for registration under the Historic Places Act 1993; and adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area”.

[Decision number 200710029.]

Trans Tasman acquires Waterside Business Centre, Auckland for $8m

Trans Tasman Properties Limited, owned 77.27% in Hong Kong by SEA Holdings Limited and 22.73% in Aotearoa by minority shareholders, has approval to acquire Waterside Business Centre Limited, including 12 hectares in two blocks at Walmsley Road, Mangere, Auckland, for $8,144,415 from Phoenix Properties Limited of Aotearoa.

The OIO states:

Trans Tasman Properties (TTP), or its wholly-owned subsidiary Asia Pacific Properties Limited, proposes to acquire all of the shares in Waterside Business Centre Limited (Waterside) a company that owns, or has entered into a contract to acquire the subject land. Waterside is currently seeking an amendment to have the land which is zoned Future Development Stage 1 by the Manukau City Council to be rezoned Business 5 (or a proposed new zoning, Business 5 Favona) in order for the development of a proposed business park or light industrial/retail centre. The proposed acquisition of Waterside will further consolidate the Applicant’s portfolio of industrial/commercial property development which is consistent with the Applicant’s investment strategy in the Auckland region.

[Decision number 200710016.]

Macquarie Goodman buys three leases in Westneys Road, Manukau

In three OIO decisions, Macquarie Goodman Nominee (NZ) Limited and Macquarie Goodman Nominee (NZ) No 2 Limited as nominee of the Macquarie Goodman Property Trust and Macquarie Goodman Group, owned 52.0829% in Australia by minority shareholders, 4.25% in Australia by Macquarie Bank Limited, 4.2147% in various other countries, 34.2596% in Aotearoa by minority shareholders, and 5.1929% in Aotearoa by Goodman Holdings, has approval to acquire leases over land which “includes/adjoins land that exceeds 0.4 hectares which is provided as a reserve, a public park, for recreation purposes, or a private open space”. The leaseholds are all at 60 Westney Road, Manukau, Auckland, and are being acquired for a suppressed amount from Workstore Developments Limited, owned 50% in Aotearoa by Richard Balcombe-Langridge, Glenda Eveleen Balcombe-Langridge and Andrew Balcombe-Langridge as trustees of the Chiswick Trust, 25% in Aotearoa by Christopher Verissimo as trustee of the Christopher Verissimo Trust, and 25% in Aotearoa by Terrence John Scott as trustee of the Terrence John Scott Trust.

In each case, according to the OIO,

The Applicant has received consent to enter into options to lease all of or part of a 34 hectares property located at 60 Westney Road, Manukau, Auckland. The Applicant proposes to enter into a ground lease of the subject property (which forms part of the 34 hectare property) from Workstore Developments Limited (Workstore) for an initial term of 20 years. The ground lease will be perpetually renewable.

The three pieces of land are:

· 0.138 hectares; on which the OIO reports that “the Applicant proposes to undertake a commercial property development on the subject land which will be sub-leased to BP Oil New Zealand Limited to be utilised for a commercial re-fuelling facility.” [Decision number 200710020.]

· 0.401 hectares; “the Applicant proposes to undertake a commercial property development on the subject land which will be sub-leased to Apollo Motorhome Holidays Limited to be utilised for warehouse and distribution facilities.” [Decision number 200710021.]

· 1.202 hectares; here “the Applicant proposes to undertake a commercial property development on the subject land which will be sub-leased to Gluck IDS Limited to be utilised for warehouse and distribution facilities.” [Decision number 200710022.]

Macquarie Goodman have been purchasing leases at that address from Workstore since 2004: for details see our commentary on the November 2004, May 2006 and September 2006 decisions.

U.K. firm buys half share in supermarkets and shopping centres from Macquarie

Antipodean Supermarkets Limited, owned 75% by The William Pears Group of Companies Limited and 25% by Jonathan Berman, both of the U.K., has approval to acquire 4.3 hectares comprising 3.1 hectares at Meadowbank Shopping Centre, Corner Gerard Way and St Johns Road, Meadowbank, 16-24 Anzac Road, Browns Bay, and 2-10 and 12-16 Barrys Point Road, Takapuna, Auckland; and 1.2 hectares at 9 Browne Street, Timaru, Canterbury for $103,450,000, from Macquarie CountryWide Trust, of Australia.

According to the OIO,

The Applicant has entered into an Agreement for Sale and Purchase and a Co-ownership Deed in respect of acquiring a half-share in a portfolio of 18 retail properties currently held by The Macquarie Countrywide (NZ) Trust. The property portfolio comprises supermarkets and supermarket-based shopping centres.

The land “either alone or together with any associated land, … adjoins the foreshore; and … an esplanade reserve, esplanade strip, recreation reserve, a road or a Maori reservation, that adjoins the sea or a lake; and … adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area.”

[Decision number 200710030.]

AMP fund acquires 9 ha. by its Northwood Supa Centre, Belfast, Christchurch

AMP NZ Property Retail Limited, owned 36.6% in Australia and 63.4% in Aotearoa, has approval to acquire 9 hectares at 480, 486 and 490 Main North Road and 20 Radcliffe Road, Belfast, Christchurch, Canterbury for $25,790,240 from Radcliffe Investments Limited, owned in Aotearoa. The land “either alone or together with any associated land … adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area”.

According to the OIO,

The Applicant is the retail acquisition vehicle of the AMP NZ Property Fund, a diversified property fund investing in commercial office, industrial, retail and hotel development properties in New Zealand and is managed by AMP Capital Investors (New Zealand) Limited. The Applicant is proposing to acquire the land, which is adjacent to the Northwood Supa Centre owned by the Applicant, for the development of an extension to the retail shopping centre.

[Decision number 200710026.]

CTC Aviation Training to buy more Hamilton land for training facilities

CTC Aviation Training (NZ) Limited, owned in the U.K., has approval to acquire 6 hectares of freehold and leasehold at 404 Raynes Road, Tamahere, Hamilton, Waikato for $4,879,314 from Meridian 37 Limited, owned in Aotearoa.

The OIO states:

CTC Aviation Training (NZ) Limited (CTC NZ) undertakes aviation training operations located at a purpose built training centre at Hamilton Airport. This training centre comprises a ground school, flight operations and flight simulator facility, and includes an exclusive aircraft parking ramp and taxiway and a maintenance hangar. The acquisition of the land will enable the CTC NZ to expand the accommodation facilities at the Hamilton Airport training centre.

The land “either alone or together with any associated land … is or includes land subject to a heritage order, or a requirement for a heritage order, under the Resource Management Act 1991 or by the Historic Places Trust under the Historic Places Act 1993”.

[Decision number 200710031.]

Tiong’s Neil Properties acquires Cambridge land for residential subdivision

Neil Properties Limited, owned in Malaysia by the Tiong Family, has approval to acquire 7 hectares at Goldsmith and Coleridge Street, Cambridge, Waikato for $9,620,000 from Jean Gordon Kittow and John Elliot Boone as trustees of the Jean Kittow Trust (50%), and Hugh Campbell MacDiarmid (50%), all of Aotearoa.

The OIO states:

The Applicant which is part of The Neil Group of companies acquires land for residential subdivision, development and resale. The Applicant proposes to acquire the subject land to add it to the company’s portfolio of land for residential subdivision. The land is currently used for residential purposes. The Applicant proposes that the acquisition of the subject land will provide for comprehensive residential development of up to 150 to 180 residential units. The development of the subject land is likely to commence in 2008 and be completed in 2012.

The land, “either alone or together with any associated land, … adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area”.

[Decision number 200710032.]

Blakely Pacific acquires 2000 ha. Saddle Peak Station, Canterbury, for forestry

Blakely Pacific Limited, owned in the U.S.A. by the Eddy Family, has approval to acquire 2,082 hectares at Saddle Peak, Waihi Gorge Road, Geraldine, Canterbury for a suppressed amount from The New Zealand Redwood Company, owned by the Soper and Wheeler Families of the U.S.A.

According to the OIO,

Blakely Pacific Limited (Blakely) proposes to acquire the land known as Saddle Peak Station situated near Geraldine. The land contains a net stocked area of approximately 900 hectares established predominantly in douglas fir forestry by the vendor during 2000 to 2004. The land is located nearby to Geraldine Forest an existing forestry investment which Blakely received consent to acquire in 1999.

Blakely is a major forestry owner in Aotearoa. Its previous acquisition, in December 2005, was 97 hectares at Te Moana Road, Geraldine. See our commentary for that month for further details.

The Soper and Wheeler families have made a number of land purchases, the last being in December 2004 (see our commentary for that month for further details). They purchased Saddle Peak largely for forestry in February 2002 for $1,629,000. At the time the Overseas Investment Commission reported that, “there is a large area of the subject property at higher altitude which has had very low levels of grazing by the vendor over summer. This area also contains a number of trophy hunting wild animals and is essentially marginal for either farming or forestry.”

[Decision number 200710018.]

Bourgeois family expands vineyard on 12 ha. in Marlborough

Moonee Property Limited, owned in France by the Bourgeois Family, has approval to acquire 12 hectares at State Highway 63, Renwick, Blenheim, Marlborough for $253,125 from The Delta Wine Company Limited of Aotearoa.

The OIO states:

The objective of the Bourgeois family in New Zealand is to create unique wines following traditional French wine making methods. The first vintage in New Zealand was produced in 2003 and has been well received at an international level. The application arises due to an adjacent property owner embarking upon a subdivision of its land and a surplus of land being established. The surplus land adjoins the Applicant’s existing land holding and as a condition of the subdivision it is to be amalgamated with the Applicant’s land. Essentially a boundary adjustment would take place.

The family last gained approval to acquire land in February 2002, and before that in September 2000. See our commentaries for those months for further details.

[Decision number 200710024.]

Westervelts of US buy Poronui Station and “Ranch” with conditions attached

Westervelt Sporting Lodges (NZ) Limited, owned in the U.S.A. by the Westervelt Family, has approval to acquire 6,449 hectares at State Highway 5, Taupo, Bay of Plenty for a suppressed amount from Poronui Ranch Limited, owned in the U.S.A. by Mark Christopher Blake; and Poronui Station Limited, owned 56% by Mark Christopher Blake, 33% by Wendy Margarete Blake, and 11% by Todd Austin Blake, all of the U.S.A.

The land “either alone or together with any associated land … adjoins land held for conservation purposes under the Conservation Act 1987”.

According to the OIO,

Westervelt Sporting Lodges (NZ) Limited (Westervelt) proposes to acquire the land known as Poronui which has been developed by the vendor as a world class sporting facility for guided trout fishing and sika deer hunting, and other eco-tourist activities including nature trails, mountain biking, horse trekking and hiking. The land includes a world class fishing lodge offering accommodation to tourists, forestry which is the subject of forestry rights granted by the vendor to third parties and pastoral land over which grazing rights have been granted to third parties.

The proposed acquisition by Westervelt is part of The Westervelt Company’s strategy to expand its sporting lodge network beyond North America. Westervelt’s New Zealand activities include farming, forestry, recreational and tourist based activities such as hunting, fresh water fishing, tramping, horse trekking, clay bird shooting and tourist accommodation.

Poronui has been a high profile tourist venture and controversial land holding, with New Zealand sports people concerned that its owners were preventing them access (see our commentary on the June 1998 OIC decision approving the sale of the Station to the Blakes). The approval states that the sale includes

a conservation covenant and a management agreement will be put in place to protect existing areas of significant indigenous vegetation and significant indigenous fauna habitats (native beech forest and a small-scaled skink population); the provision of walking access by the public to significant habitats of trout; improved mechanisms (the grant of walkway easements to the Crown) providing for walking access over parts of the land; and the acquisition by the Crown of the riverbeds within the land.

A press release by Finance Minister Michael Cullen and the Minister for Land Information David Parker on 27/3/07 stated that these and other conditions were a binding condition of the approval:

Michael Cullen said the station was overseas owned before and remains overseas owned. “But the government has used the sale process to make important riverbeds publicly owned, and to ensure permanent legal walking access to the rivers and through the station for all New Zealanders.”

Poronui Station is a privately owned world-class sporting lodge currently owned by an American family. It offers guided trout fishing, sika deer hunting and other eco-tourist activities, including nature trails, mountain biking, horse trekking and hiking. Most of the property is devoted to farming and forestry. These activities will continue under the new ownership.

“Because Poronui Station is a site with special environmental values, the potential purchaser of this property had to undergo a rigorous screening process as required by the Overseas Investment Act 2005. The Act is designed to recognise that it is a privilege for overseas investors to own or control sensitive New Zealand land,” Dr Cullen said.

“Those investors must show ministers that their ownership of the land will benefit New Zealand. They must provide details of how they will manage any conservation or public access factors relevant to the property as well as any economic development undertaken. The plans they submit are made conditions of consent.

The press release stated that

Conditions of consent for the sale of Poronui Station include:

· Westervelt will grant a legal easement over parts of a marked route through the property that is not already legal road. The easement will include three angler access points to the Taharua River

· The parts of the riverbeds of the Mohaka and Taharua Rivers currently in the Poronui Station land titles are transferred to the Crown

· Westervelt has developed a Public Access Policy that outlines requirements around the other “on request” access routes. Details must be published on Poronui Station’s website www.poronuistation.com

· Westervelt must work with Fish and Game New Zealand to promote jointly branded information including mapping and signage which make clear “as of right” and “on request” access routes over the property

· The indigenous beech forest on the land will be protected by a covenant with the Department of Conservation

· The skink population on the property will be protected by way of a management agreement with the Department of Conservation

· Westervelt must continue to allow local iwi access to the property for eeling.

(“Poronui Station sale good for NZ”, press release by David Parker, 27 March 2007, http://www.beehive.govt.nz/ViewDocument.aspx?DocumentID=28796, also released on same date by Michael Cullen as “New Zealanders gain conservation and public access benefits from sale”.)

The Blakes still have land holdings in Aotearoa, last getting OIC approval in February 2003, to acquire vineyards in Hawkes Bay. See our commentary for that month for further details.

Mark Blake’s Poronui Ranch Ltd gained approval to acquire the 121 hectare “Poronui Ranch” in July 2001 from Poronui Station Ltd. “Poronui Ranch” adjoins the 6,334 hectare Poronui Station, which the Blakes acquired in June 1998 from Carter Holt Harvey. See our commentary for the relevant months for further details.

Westervelt Sporting Lodges (NZ) Limited gained approval to acquire the 8,883 hectare Glazebrook Station, Waihopai Valley Road, Blenheim, Marlborough for $5,111,406 in June 2006. See our commentary for that month for further details. The OIO stated in that decision that Westervelt Sporting Lodges

is a wholly-owned subsidiary of Gulf States Paper Corporation, a sixth generation, family owned business, which has 102 shareholders predominantly made up of individuals and trusts associated with the direct descendants of Herbert Westervelt, who founded the company in 1884, and his brother E.C. Westervelt. The Gulf States Paper Corporation is a United States of America based company whose principal businesses are timberlands (400,000 acres), a sawmill/wood products division, a real estate division developing land for upscale neighbourhoods, and a recreation division that manages recreational hunting leases, sporting lodges, providing outfitting services and wildlife consulting for private landowners.

[Decision number 200710025.]

U.K. company acquires Tauranga kiwifruit company including 21 ha.

Matai Pacific Limited, owned 75% by Walter Lennox Hannay, Christopher Michael Fleming and Mary Fern Taylor as trustees of the Lennox Hannay 1992 Trust, and 25% by Walter Lennox Hannay, all of the U.K., has approval to acquire Pyes Pa Pacific Limited, including 21 hectares at 95-97 Kennedy Road, Pyes Pa, Tauranga, Bay of Plenty for $3,900,000 from Christopher Neil Alexander Marr of Aotearoa.

The OIO states:

Matai Pacific Limited (Matai) proposes to acquire the shares and shareholders loan accounts of Pyes Pa Pacific Limited a company whose sole asset is the land which includes approximately 12.5 canopy hectares of Hayward kiwifruit, 1 hectare of avocados, kiwifruit post-harvesting facilities including a coolstore and packhouse. The acquisition will provide diversification to Matai’s previous kiwifruit investments in terms of geography and topography thereby spreading the climatic and growing risks.

The company has made previous land purchases, the last approval being in August 2005. See our commentary for that month for further details.

[Decision number 200710027.]

Summary statistics

All investments

Value of investments approved in 2007 to March cannot be compared with the same period the previous year because that year’s March totals were suppressed.

Value of Investments approved
	March 2007	2007 YTD	2006 Year to March
Number of approvals	18	30	29
Net Investment	76,432,454	1,769,406,073	Confidential
Gross value of consideration	758,361,477	2,780,796,428	Confidential

Investments Refused under The Overseas Investment Acts 1973 and 2005
	March 2007	2007 YTD	2006 Year to March
Number of Refusals	1	3	1
Gross value of consideration ($)	649,587	2,018,337	506,250
Gross land area (ha)	8	27	22

Investment involving land

Gross sales of land approved by the OIO during the years to March have considerably increased in area, but net sales fell. Refusals (above) have risen in number, area and value, but are still a tiny proportion of the total.

Freehold Land Approved for Sale
	March 2007	2007 YTD	2006 Year to March
Number of approvals	10	15	23
Net land area (ha)	53	595	810
Gross land area (ha)	8,641	9,439	1,030

Other Interests in Land Approved for Sale (For Example, Leases & Crown Pastoral Leases)
	March 2007	2007 YTD	2006 Year to March
Number of Approvals	5	7	5
Net land area (ha)	6	124	12
Gross land area (ha)	6	165	95

Fishing Quota

There was no fishing quota approved for sale this month or this year.

Compiled by:

Campaign Against Foreign Control of Aotearoa,

P. O. Box 2258

Christchurch.