March 2008 decisionsGoldman Sachs JB Were buy further 36% of Vision Senior Living, making 55% ... … with view to development of retirement village at Carlaw Park, Auckland Woolworths Australia get approval to buy The Warehouse Ernslaw One acquires Winstone Pulp, 14,000 ha Waimarino Forest, Karioi Forest Trustpower acquires land for canal for Wairau Valley hydro scheme Fletchers acquires buffer land for Hunua Quarry, North Auckland
Goldman Sachs JB Were buy further 36% of Vision Senior Living, making 55% ...In another example of the financialisation of the care of our aged people, Goldman Sachs JBWere (NZ) Private Equity Limited (JBWere NZ) “(an overseas person)” on behalf of Goldman Sachs JBWere Trans Tasman Private Equity Fund 07, owned 39.1% in Australia, 13.43% by “various overseas persons”, and 47.47% in Aotearoa, has approval to acquire “rights and interests in and up to 35.53% of the shares” of Vision Senior Living Limited (VSL), the parent company of Vision Parnell Limited and other subsidiaries for $54,000,000.
This results in “an indirect interest in land” as follows:
· 16 hectares of freehold: o 2.6 hectares at 15 Sel Peacock Drive, Henderson, Auckland; o 5 hectares at Ken Browne Drive, Forest Lake, Hamilton, Waikato; and o 8 hectares at Parton Road, Papamoa, Tauranga, Bay of Plenty.
· 6 hectares of leasehold: o 1.3 hectares at 8 Carlaw Park Avenue, Parnell, Auckland (see next decision); and o 4.4 hectares at Oakridge Drive, Kerikeri, Northland.
Vision Senior Living Limited was owned 35.545% by Ronald Douglas Anderson, 35.545% by Robert Athol Foster, 25.34% by Peter John Bourke, and 3.57% by other shareholders, all of Aotearoa.
According to the OIO,
Goldman Sachs JBWere (NZ) Private Equity Limited (JBWere NZ) on behalf of private equity funds Hauraki Private Equity No.2 Fund Limited and Special Managed Investment Company No.90 Limited received consent on 12 June 2006 to acquire 28.5% of VSL.
VSL owns and operates retirement villages situated at Henderson and Botany Downs, Auckland, Forest Lake, Hamilton, Papamoa, Tauranga, and Kerikeri. That investment provided funding to VSL for the continued development and acquisition of retirement villages.
JB Were NZ and Goldman Sachs JBWere PIA (Management) Pty Limited (together GSJBW Private Equity) as manager and delegated manager on behalf of Goldman Sachs JBWere Trans Tasman Private Equity Fund 07 (Trans Tasman) propose to acquire 35.53% of the shares in VSL through the acquisition of existing shares and subscribing for new shares in VSL.
As a result of the proposed acquisition, GSJBW Private Equity will directly or indirectly, through its associates, control a 55.22% shareholding in VSL.
The proposed acquisition of the shares in VSL will provide continued funding to VSL for the continued development and acquisition of retirement villages. VSL is currently undertaking or proposing to undertake developments at Carlaw Park, Auckland, Oakridge Drive, Kerikeri and Peer Street, Christchurch.
See our commentary for June 2006 for further details of the original acquisition of 28.5% of the company by Goldman Sachs JBWere funds.
[Decision number 200810019.] … with view to development of retirement village at Carlaw Park, AucklandIn a related decision, with regard to the Carlaw Park land mentioned above, Vision Parnell Limited, “an overseas controlled person”, has approval to acquire 1.3 hectares of leasehold at 6-20 Carlaw Park Avenue, Parnell, Auckland, which adjoins land “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 which adjoins land “that is listed, or in a class listed, as a reserve, a public park, or other sensitive area” by the OIO.
It is being purchased for $125,000,000 from Carlaw Developments Limited of Aotearoa.
The OIO says that Vision Parnell is owned 25.4147% by Ronald Douglas Anderson, 25.4147% by Robert Athol Foster, 18.1181% by Peter John Bourke, and 31.0525% by other shareholders, all of Aotearoa. It is not clear how that can be consistent with the previous decision.
According to the OIO,
The proposed investment involves the development of a retirement village on part of Carlaw Park situated in central Auckland. Auckland Rugby League (Incorporated) (ARL) will grant ground leases to Carlaw Developments Limited (Carlaw Developments) over part of Carlaw Park upon which Carlaw Developments will develop a retirement village.
Vision Parnell Limited (Vision Parnell), the overseas controlled person, will progressively acquire the retirement village upon completion of each stage by Carlaw Developments and will take assignments of the ground leases over the relevant land. Vision Parnell will market and sell occupation licences for residential units in the development to potential residents. The retirement village will comprise approximately 200 units with community facilities including a restaurant, lounges, library, pool, gym, theatre, gardens and activities area.
The proposed investment is part of Vision Parnell’s strategy to develop, own and operate quality 60 years + retirement villages throughout New Zealand.
[Decision number 200810020.] Woolworths Australia get approval to buy The WarehouseIn a decision which dramatically illustrates the disconnection between the OIO’s decision making and what other government agencies are doing, Woolworths Limited of Australia has approval to acquire “up to 100% of the shares of, or the assets of, The Warehouse Group Limited or all or any of its subsidiaries”.
Woolworths and Foodstuffs, the dominant supermarket owners in Aotearoa, at the time were in the middle of a long drawn-out contest to buy The Warehouse. It was stymied by the Commerce Commission which had refused them permission on the basis that if either of them purchased it, they would gain “a substantial increase in market power”, and “there is a real risk that prices will be materially higher, and quality, service and innovation materially lower”. Woolworths (supermarket brands Woolworths, Foodtown and Countdown, plus coordinating the SuperValue and Fresh Choice franchises) and Foodstuffs (supermarket brands Pak’n Save, New World and Four Square) between them own almost all of the supermarkets in Aotearoa: according to the Commerce Commission,
Woolworths and Foodstuffs operate supermarkets throughout New Zealand. Over the country as a whole, Foodstuffs collectively accounts for 56% of supermarket sales and Woolworths 44%. In all regions, the markets are highly concentrated, and only in Mt Wellington and Whangarei do Foodstuffs and Woolworths face a third competing supermarket, The Warehouse Extra. The applicants will shortly face competition from The Warehouse in Te Rapa, Hamilton. (Commerce Commission Decisions numbers 606 and 607, 8/6/07).
At the time of this OIO approval, the Commerce Commission had appealed a November 2007 High Court ruling against the Commission’s decision that neither of the two oligopolists could take over The Warehouse.
The price for the approved acquisition is (understandably) “to be advised”. Woolworths had earlier bought a 10% shareholding in The Warehouse to be able to block a Foodstuffs takeover. Apart from this shareholding, The Warehouse Group Limited was owned 29.93% by its founder, Stephen Robert Tindall, 23.9% by The Tindall Foundation, 11.01% by Foodstuffs (Wellington) Co-operative Society Limited, Foodstuffs (Auckland) Limited and Foodstuffs South Island Limited, and 35.16% by other shareholders, all of Aotearoa.
If it goes ahead, the purchase would include 14 hectares of freehold: · 2.8 hectares at 42 Port Road, Whangarei, Northland; · 2.7 hectares at 70-90, 98-100 Leven Street, Invercargill, Southland; and · 8 hectares at 2-20 The Warehouse Way, Northcote, Auckland and 834 Great South Road, Manukau, Auckland.
and 77 hectares of leasehold: · 3.3 hectares at Goldfields Shopping Centre, Queen Street, Thames, Coromandel and 41 Waharoa Road East, Matamata, Waikato; · 2.0 hectares at Mawhera Quay, Greymouth, West Coast; · 10 hectares at 39 Maclaggan Street, Dunedin and Remarkables Park, Hawthorne Drive, Queenstown, Otago; · 2.3 hectares at 23-35 St Vincent Street, Nelson; · 5 hectares at 4 Kermode Street, Ashburton and Barrington Mall, 256 Barrington Street, Christchurch, Canterbury; and
The OIO states:
Woolworths Limited (Woolworths) proposes to acquire 100% of the shares in The Warehouse Limited, a company whose principal business activities are general merchandise retailing (The Warehouse, under the Red Shed brand) and stationery retailing (Warehouse Stationery, under the Blue Shed brand) throughout New Zealand. Woolworths views the acquisition as the most efficient, timely and sustainable means of entering general merchandise retailing in New Zealand.
[Decision number 200810022.] Ernslaw One acquires Winstone Pulp, 14,000 ha Waimarino Forest, Karioi ForestErnslaw One Limited, owned in Malaysia by the Tiong Family, has approval to acquire Winstone Pulp International Limited, including 3,896 hectares of freehold at Waimarino Forest and the Karioi pulp mill, and 10,059 hectares of leasehold at Waimarino Forest and the Tangiwai sawmill, Taranaki/Wanganui for $117,293,314 from Waimarino Forests Limited, PMI Nominees Limited and Perfect Match Nominees Limited, owned in Indonesia. The land adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area by the OIO.
Winston Pulp was in financial trouble due to the high New Zealand dollar exchange rate and competition from China and elsewhere. The OIO describes its ownership as being in Indonesia, but news reports note that it is registered in Hong Kong and the British Virgin Islands.
The purchase makes Ernslaw One the fourth largest forestry owner in Aotearoa (Dominion Post, “Malaysian firm to buy Winstone Pulp”, by Andrew Janes, 5/12/07, http://www.stuff.co.nz/4312159a13.html).
The OIO states:
Ernslaw One Limited (Ernslaw One) proposes to enter into Agreements for Sale and Purchase to acquire 100% of the shares in Winstone Pulp International Limited (Winstone Pulp) and certain forestry assets including freehold land directly from a subsidiary of Winstone Pulp. The assets of Winstone Pulp include the Waimarino Forest, Karioi Forest Crown Forestry Licences, the Karioi pulp mill, the Tangiwai sawmill and residential land held for company employees.
Ernslaw One and Winstone Pulp both operate in the New Zealand forestry and wood processing industries. Some of Ernslaw One's forest resource is located in the North Island, within economic reach of Winstone Pulp's Karioi pulp mill and Tangiwai sawmill. Ernslaw One operates sawmills situated in Gisborne and Gore.
The investment will provide Ernslaw One with a greater wood supply security for wood processing and provides opportunities for synergies and economies of scale between Ernslaw One's and Winstone Pulp's operations.
Overseas ownership of Crown Forestry Licences does not require OIO approval, despite the fact that the licences give the leaseholder significant control over the use of the land.
[Decision number 200810027.] Trustpower acquires land for canal for Wairau Valley hydro schemeTwo approvals for a subsidiary of Trustpower, Follies Ltd, to acquire land in the Wairau Valley for canals for its controversial hydro-electric power scheme, originally had their prices suppressed, but these were released by the OIO on appeal by CAFCA. The decisions have added interest in that they explain details about the shareholdings of Trustpower’s major shareholder, Infratil. Trustpower is 50.5% owned by Infratil, 33% by the Tauranga Energy Consumer Trust, and 16.5% by other shareholders.
Follies Limited, ultimately owned 9.7857% in the U.K., 7.1521% by “various overseas persons”, and 83.0621% in Aotearoa, has approval to acquire two blocks of land:
· 9 hectares at 2191 State Highway 63, Wairau Valley, Marlborough for $1,130,625 from Stephen Leonard Smith and Jacqueline Ann Smith of Aotearoa [Decision number 200810023]; and
· 127 hectares at 2387 State Highway 63, Wairau Valley, Marlborough for $2,981,250 from Thomas Douglas Hutchison of Aotearoa [Decision number 200810024].
According to the OIO, in both cases:
Follies Limited is a wholly-owned subsidiary of TrustPower Limited (TrustPower). Infratil Limited (through a number of its subsidiaries) holds 50.5326% of the shares of TrustPower Limited. Infratil Limited (under its former name, Infrastructure and Utilities NZ Limited), is an overseas person but is New Zealand controlled, and is listed on Schedule 4 of the Overseas Investment Regulations 2005.
Approximately 4% of TrustPower’s minority shareholders are overseas persons. In addition, one of the Infratil subsidiaries has a 23.7469% holding in TrustPower Limited (Infratil Energy New Zealand Limited) and is an overseas person. This is because Arawata Finance Limited holds a class of shares in Infratil Energy New Zealand Limited. Arawata Finance Limited is an overseas person, as it is a wholly owned subsidiary of the ANZ National Bank Limited. The combined 27.7469% Infratil Energy New Zealand Limited/other minority overseas shareholder ownership makes TrustPower an overseas person under section 12(b)(iii) of the Act.
TrustPower proposes to develop a hydroelectric power scheme in the Wairau Valley in the Marlborough region. The proposed scheme is an extension of the Branch hydroelectric scheme owned by TrustPower. Under the project, part of the Wairau River flow would be diverted into the existing Branch scheme and the water conveyed through interconnecting canals and penstocks to five new generating stations.
TrustPower advises that the Wairau Valley scheme will cover approximately 350 hectares of land, of which approximately 300 hectares will be secured by way of easement (canals and small ponds) and the remaining 50 hectares, occupied by power stations and other large structures, will be owned by TrustPower.
TrustPower proposes to acquire the relevant land to enable it to convey water flow by means of an open canal.
TrustPower’s core business is to generate and sell electricity. TrustPower currently has a gap between the electricity it generates and the electricity it sells to consumers meaning it is required to purchase electricity to sell to consumers leaving it vulnerable to price movements when hedges are not available, particularly during periods of electricity shortages. The proposed acquisition will reduce the Applicant’s potential exposure to electricity price rises.
[Decision number 200810023.] Fletchers acquires buffer land for Hunua Quarry, North AucklandFletcher Concrete and Infrastructure Limited, owned 35% in Australia, 14% in the U.S.A., 9% by “various overseas persons”, and 42% in Aotearoa, has approval to acquire 10 hectares at Ponga Road, Hunua, North Auckland for $875,000 from Ponga Rd Farms Limited of Aotearoa.
According to the OIO,
The Applicant currently operates at the Hunua Quarry, which has been in operation since 1934. The first extraction area of the quarry has less than five years resource remaining. Hunua Quarry is a vital site for meeting future supply demands for roading and other infrastructure industries in the wider Auckland region. Therefore, the Applicant intends to open a second extraction area within the Hunua Quarry, in a location known as Symonds Hill, which is in the vicinity of the vendor’s development. The vendor’s land, which is adjacent to the Applicant’s land, is currently being subdivided into lifestyle blocks. This purchase of the relevant land by the Applicant is necessary to enable the development of the Symonds Hill resource.
The Applicant has concerns relating to ‘reverse sensitivity’ effects and is therefore seeking to purchase the land to provide a buffer zone between the Hunua Quarry and the lifestyle blocks of the vendor’s development. The Applicant wishes to purchase the property so the owners of the lifestyle blocks will be protected from noise, dust and other quarrying effects.
[Decision number 200810026.] Other land for forestry· Pacific Trees Limited, owned 100% in Portugal by Diogo Fialho De Oliveira, has approval to acquire 405 hectares at 16N Glenholme Road, Whakatane and Waiotahi Valley Road, Opotiki, Bay of Plenty for $905,000 from East Woodlands Limited, owned in Aotearoa by Kiwi Forests Group Limited. The land adjoins a scientific, scenic, historic, or nature reserve under the Reserves Act 1977 that is administered by the Department of Conservation. According to the OIO, “Pacific Trees has entered into an agreement for sale and purchase to acquire the relevant land from East Woodlands Limited (East Woodlands). The relevant land contains approximately 367.8 hectares of radiata pine forestry established during 1985 to 1988. East Woodland’s principal business activity is the granting of forestry rights to individuals for the purpose of planting, managing and harvesting commercial forests. The relevant land is subject to two forestry rights in which areas of land are progressively returned to East Woodlands in a cutover state as the trees are harvested. East Woodlands have sought to identify and negotiate new forestry rights for the replanting of the returned land area but have been unable to do so. East Woodlands has agreed to sell the land to Pacific Trees, subject to one forestry right (it is intended that the other forestry right will be surrendered prior to settlement of the sale to Pacific Trees). Pacific Trees intends to replant the forest as parts of the property are handed back to Pacific Trees under the current forestry right. Pacific Trees’ primary objective is to diversify into other forestry species including Coast Redwood, Mexican Cypress and Blackwood. Pacific Trees advises that these species will be established following the harvesting of the current forest rotation during 2012 to 2015. Pacific Trees believes that these species will produce high value decorative grade timber for which there are both domestic and export opportunities.” [Decision number 200810028.] · Craigpine Timber Limited, owned 43.12% by Graeme Lewis Sims Black, 18.96% by Quentin John Sims Black, 18.96% by Nerissa Margaret Guest, all of Australia, and 18.96% by Marian Catharine Black of Aotearoa, has approval to acquire 400 hectares at Dipton Flat Road, near Dipton, Southland for $900,000 from Pinnacle Pine Forest Partnership of Aotearoa. According to the OIO, “the Applicant intends to purchase the land and forestry assets known as the Pinnacle Pine Forest. The Applicant has already commenced work on the harvesting of an initial 35.5 hectares under an agreement to purchase the forest crop. The Applicant will acquire the subject land to secure long-term future timber supplies for the Applicant’s sawmill located in Winton. Craigpine will purchase increments of Pinnacle Pine Forest over an eight year period from the time of consent, then maintain, harvest, mill and replant the forestry resource contained in the purchased increments. The Applicant intends to purchase further forestry assets as opportunities arise to add to the forestry estate it has established in the Winton area. The acquisition of the land will enable the Applicant to replant the trees as they are harvested, thereby adding to a forest estate which will support the sawmill operations in the future.” Craigpine and the Black family have extensive investments in forestry in Aotearoa. See our commentary for May 2007 for their last approval. [Decision number 200810021.] Land for wine· Cloudy Bay Vineyards Limited, owned 66% in France by Moet Hennessy Louis Vuitton, and 34% in the U.K. by Diageo Plc, has approval to acquire 43 hectares at Conders Bend Road and Bedford Road, Marlborough for $10,710,000 from Riversleigh Partnership, owned 50% by William Stapleton, 25% by Geoffrey Sprot, and 25% by Belinda Jane Sprot, all of the U.K. According to the OIO, “Cloudy Bay Vineyards Limited (CBV) has established itself world wide as a pre-eminent producer primarily of Sauvignon Blanc wine. Demand has recently out stripped supply in many countries which CBV exports, especially North America, Australia, and the United Kingdom. To satisfy this demand CBV has seen it necessary to purchase further land. CBV as an established producer of premium Marlborough wines, proposes to acquire developed vineyards in order to secure an additional grape supply. The Applicant has entered into an agreement to purchase three vineyard properties situated at Bedford Road and Conders Road. The purchase of the proposed properties will provide 36 hectares of productive vineyard to meet some of the targeted demand. The properties have been identified as being ideal due to their varietal mix. The diverse varietal planting of the three properties is a significant factor in the Applicant’s decision to purchase these properties. The acquisition is important to the Applicant’s project of producing Pinot Gris, which has been identified as a growth product. The acquisition will allow for a 70% growth from the 2007 vintage of this variety. Another driving motivator to purchase the land is the need for CBV to become self sufficient with fruit supply. CBV currently has 46% self-sufficiency across all varietals, with the balance of fruit supply obtained from contract growers. CBV must manage its own supply to reduce the risk resulting from weather and reliance on contract growers. In addition, the Bedford Road property adjoins land already owned by CBV, which will allow the two blocks of land to be farmed together and consolidate resources.” [Decision number 200810029.] Other rural land sales· Frederik Martin Timmermans and Ellen Irmgard Dorothea Timmermans-Kemp of the Netherlands have approval to acquire 16 hectares at Boons Valley Road, Waikawa, Marlborough, for $412,500 from Irene Heather Mack and Wayne Irving Seymour (50% each), of Aotearoa. The property adjoins land held for conservation purposes under the Conservation Act 1987. The OIO states: “Mr Timmermans is a qualified Dental Surgeon and has immigrated to New Zealand under the Work to Residency Scheme. Together Mr and Mrs Timmermans operate a dental practice in Picton, where Mrs Timmermans assists in the management of the dental practice. The dental practice is the only one operating in the Picton/Marlborough Sounds area, which has a population of approximately 8,500. The Applicants are Dutch citizens currently residing in New Zealand on Long Term Business Visas. The Applicants’ daughter also resides with them and currently holds a student visa. The land is a lifestyle property, which is steep and completely covered in regenerated native bush and has no productive use. The Applicants intend to build a house on the land to use as their permanent residence and have no plans to further develop the land because of its location and characteristics.” [Decision number 200810025.] Summary statisticsAll investments The value of investment approved in the year to March 2008 is lower than for the previous March year, with the net value (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) much lower – only 7% of the previous year’s comparable period. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Investment involving land Gross sales of freehold land approved by the OIO during the year to March 2008 are not much more than half the comparable period in 2007, but gross sales of leased land are much higher (due to the sale of the leasehold Waimarino Forest) and net freehold sales are three-quarters higher than last year. There have still been no refusals this year, compared to three at the same time in 2007 (see above).
Fishing Quota As usual, there was no fishing quota approved for sale this month.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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