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Foreign investment in Aotearoa/New Zealand

Overseas Investment Office - February 2011 Decisions

Chinese Restructure Their Ownership Of Mangakahia Forest

A busy month at the OIO and we start with two significant forestry deals. In the first Decision Greenheart Group Limited Sino-Forest Corporation (58.6%), Hong Kong Public and various other overseas persons (41.4%) received approval for the acquisition of rights or interests in 100% of the shares of Mega Harvest International Limited, which owns or controls a freehold interest in 12,653 hectares of land at Mangakahia Forest Estate; and for an overseas investment in significant business assets, being the Applicant's acquisition of rights or interests in 100% of the shares of Mega Harvest International Limited, the maximum consideration of which will be US$77 million. The vendor was Sino-Forest Corporation Canada Public (30%), United States Public (20.9%), Paulson & Co, United States of America (16.3%), various overseas persons (13.2%), Davis Advisors, United States of America (12.8%), and Singapore Government, Singapore (6.8%)

The OIO states: "Sino-Forest wishes to progress the Sino-Forest Group's expansion in areas outside China. Sino-Forest and the Applicant have determined that the Applicant is the appropriate international expansion vehicle, given that it already has overseas interests in Suriname. Sino-Forest will focus on forestry investments and product distribution in China. By transferring the Forest Estate to the Applicant and establishing the Applicant as the Sino-Forest Group's international expansion vehicle, the Applicant will be in a position to focus on international asset acquisition opportunities, and expansion into new markets. The Forest Estate will be consolidated with the Sino-Forest Group's existing and future international assets, allowing for the more effective and focussed management and resourcing of the Forest Estate and other investments".

The National Business Review (NBR) reported details of this transaction under the heading "Northland forest changes hands again" (12/1/11): "The 11,000ha Mangakahia F orest near Dargaville in Northland is the main asset in a $US77 ($NZ101) million forestry deal among foreign owners reported to the Hong Kong Stock Exchange. Hong Kong-listed Greenheart Group, which changed its name from Omnicorp Ltd, said it is buying MFV Ltd, which owns 13,000ha of freehold land with radiata pine plantations, the largest of which is Mangakahia, from its controlling shareholder Sino-Forest Corp for $US77m. Sino-Forest is a forest plantation owner listed on the Toronto Stock Exchange.

"Greenheart plans to raise $US37m via a share issue to help fund the transaction. The $US40m balance will be funded through a loan either provided by or guaranteed by Sino-Forest, which has some 726,000ha of tree plantations across China. In October 2010 New Zealand's Overseas Investment Office granted approval for Sino-Forest to buy the Mangakahia Forest from GFP Mangakahia Forest Venture Ltd, which was associated with global forest investor Global Forest Partners. The value of that transaction was not disclosed... Greenheart is to become a vehicle for forest asset ownership and as part of the agreement, it has the option to sell up to $US210m worth of logs, standing timber, agri-forest, timber-related and other agri-related products to Sino-Forest over the next three years.

"'China's demand for New Zealand radiata pine has increased significantly with New Zealand being the second-largest exporter of softwood into China after Russia', Greenheart chief executive and Sino-Forest Vice-Chairman Judson Martin said. 'Bringing these New Zealand assets into our portfolio is the first major initiative of our profitable investment and sustainable growth strategy for 2011'. Sino-Forest has a controlling 59% in Greenheart. Foreign ownership of New Zealand farmland has been an issue, particularly as the global financial crisis has triggered a number of transactions. Many of the plantation forests in Northland were developed by New Zealand Forest Products, which became part of Carter Holt Harvey. Carter Holt Harvey is now owned by New Zealand billionaire Graeme Hart, who is developing a global beverage packaging business. Carter Holt once had a 330,000ha forest estate, which has been sold. In 2005, 95,000ha of its forests were sold for $NZ441m". See our commentaries for December 1995, January 1996, and March 2002 for details of other transactions involving this forest. Also see our September 2009 and October 2010 commentaries describing how the current ownership structure of this forest (prior to the above transaction) came into existence.

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Hart's Carter Holt Offloads 18 Forestry Blocks

The previous Decision effectively involved no change of ownership. However in this second approval, a number of significant NZ forests have passed into overseas hands. Specifically Te Waihou Plantations Limited United States Public (34.8%), Saudia Arabia Public (22.1%), Danish Public (12.4%), Liechtenstein Public (12.4%), German Public (5.7%), Swedish Public (5.3%), New Zealand Public (4.4%), Canada Public (2.6%), Australia Public (0.2%), and Singapore Public (0.1%), received approval for the acquisition of a freehold interest in 17,289.4 hectares of land comprising 18 forestry blocks in the Central North Island. The asset value was stated as confidential; the vendor was Carter Holt Harvey HBU Limited Graeme Richard Hart, New Zealand (100%)

The OIO states: "The Applicant intends to nurture, enhance and develop this forestry estate as a sustainable high performing business. As the existing trees are harvested under Forestry Rights held by a third party, the land will be returned progressively to the Applicant. The Applicant intends to replant these areas with plantation species that are in demand by the Kinleith pulp and paper mill and other customers. Similarly the areas which are presently cleared and which the Vendor has not replanted are intended to be replanted by the Applicant as soon as practicable. The overseas investment will create economic benefits for New Zealand and enhance the Central North Island forest industry and the New Zealand Forestry Sector".

The sale was reported in Rural News (31/3/11, Garth Vaughan): "Carter Holt Harvey, owned by New Zealand's richest man Graeme Hart, has received OIO consent to sell more than 17,000 hectares of Central North Island forestry blocks to a United States-led group for an undisclosed sum. In its Decision granting consent for the deal to go ahead, the OIO says the applicant - Te Waihou Plantations Ltd - plans to nurture, enhance and develop the forestry estate as a sustainable high performing business.

"Te Waihou's ownership is splintered between ten countries led by 34.8% ownership from the US, 22.1% from Saudi Arabia, 12.4% from Denmark and 12.4% from Liechtenstein. The OIO says as the existing trees are harvested under forestry rights held by a third party, the land will be returned progressively to Te Waihou. It will replant the land with trees in demand from Hart's Kinleith pulp and paper mill and other customers... Companies Office records list three US-based directors for Te Waihou and no shareholders. Hart bought Carter Holt for $3.3 billion in 2006 and now runs a global packaging business through Reynolds Group Holdings. According to Forbes magazine, Hart is worth $US5.5 billion". See our October 2006 commentary for details of Hart's sale of over 240,000 hectares of Carter Holt forests to Hancock Natural Resource Group Inc. of the USA, and the fight by Maori owners of some of this land to stop the sale.

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AMP Takes Control of AXA

AMP Limited Australian Public (88%), New Zealand Public (8.3%), United Kingdom Public (3.3%), and Various overseas persons (0.4%) received approval for the acquisition of rights or interests in 100% of the shares of AXA APH Pacific Holdings Limited (AXA APH), the consideration of which exceeds $100m. The vendors were existing shareholders of AXA APH Pacific Holdings Limited AXA SA, France (53.9%), Australia Public (44%), New Zealand Public (2%), and various overseas persons (0.1%) The consideration was to be advised.

The OIO states: "The proposed transaction will give the Applicant the scale and expertise to expand its independent wealth management business and provide consumers with an even broader range of low cost, simple options to meet their wealth management, retirement and financial planning needs." You may recall from our May 2010 commentary that the National Australia Bank Limited (NAB) received OIO approval to buy AXA, but the deal fell through because Australia's Competition and Consumer Commission rejected it. This allowed AMP to make a new offer, after having its original offer of $US11.5 billion trumped by NAB.

Details of the revised AMP offer were reported in the NZ Herald on (9/3/11, Jamie Gray): "The $A14 billion ($NZ19 billion) merger between AMP and AXA Asia Pacific Holdings, which is effective from March 31, has led to changes at the top on both sides of the Tasman. In Australia, AXA's Chief Financial Officer, Geoff Roberts, will be appointed to the Boards of AMP Life and National Mutual Life Assurance. In New Zealand, AXA's Chief Executive, Ralph Stewart, will move on to what AXA said were 'new personal challenges". AMP Financial Services Managing Director Jack Regan will head the merged business here. Stewart said the merger represented a 'significant opportunity for further growth. The next step for the New Zealand business is to grow our scale as quickly as possible so we can compete with the largest financial institutions in New Zealand."

"The deal involves AMP taking 100% of AXA Asia Pacific, merging its Australian and New Zealand businesses with those of AMP, and divesting AXA Asia Pacific's Asian businesses to France's AXA SA. Last week, AXA Asia Pacific's minority shareholders voted in favour of the proposal. AMP and AXA combined are expected to create stiff competition for Australia's big four banks - ANZ, Westpac, National Australia Bank and Commonwealth Bank of Australia - in the wealth management market. Under the scheme, AXA Asia Pacific shareholders are being offered 0.73 AMP shares and a cash amount based on AMP's daily volume-weighted average share price during the ten days after the effective date of the scheme.

"AXA lodged copies of the AMP/AXA scheme of arrangement with the Australian Securities and Investments Commission yesterday and the company's shares were suspended from trading at the close of business. The AMP ordinary shares that were issued to AXA Asia Pacific's minority shareholders as part payment are expected to start trading on a deferred settlement basis from today, and then on a normal settlement basis from March 31. The AMP AXA deal is a sign of the times for the wealth management industry.

"Ownership of Australasian fund manager Tyndall Investments has just passed from Australia's Suncorp-Metway to Japan's Nikko Asset Management following completion of a transaction announced in 2010. Nikko AM, which has offices in Tokyo, Singapore, London, New York and Hong Kong, is also in the throes of buying Singapore's DBS Asset Management in a deal worth $US105 million ($NZ141 million). Nikko AM's ultimate parent is Japan's Sumi tomo Trust and Banking". Financial market commentators now believe the AXA brand will soon disappear from New Zealand and, with it, several hundred jobs.

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Fletcher Building Takes Over Crane

In another significant OIO decision for February, Fletcher Building (Australia) Pty Ltd New Zealand Public (68.8%), Australia Public (30.9%), and others (0.3%) %) has received approval for the acquisition of rights or interests in 100% of the shares of Crane Group Limited which owns or controls:

• a leasehold interest in 1.2 hectares of land at 143 Central Park Drive, Henderson Auckland; and
• a leasehold interest in 0.8 hectares of land at 61 Normandy Road, Mount Eden, Auckland; and
• a leasehold interest in 0.0000 hectares (this has to be a mistake but I am quoting the OIO Website. JA.) of land at 5 Moselle Ave, Henderson Auckland; and
• a leasehold interest in 2.6 hectares of land at 28 Subway Road, Pukekohe, Auckland; and
• a leasehold interest in 1.1 hectares of land at Unit 5, Kea Building, Paroa Rd Kawerau; and
• a leasehold interest in 0.5 hectares of land at 23 Centennial Highway, Ngauranga Gorge Wellington; and
• a leasehold interest in 0.8 hectares of land at 28 Onslow Street, Invercargill; and
• a leasehold interest in 1.6 hectares of land at 92 Charlotte Street, Balclutha.

Approval was also received for an overseas investment in significant business assets, being the Applicant's acquisition of rights or interests in 100% of the shares of Crane Group Limited, the value of the assets of Crane Group Limited and its 25% or more subsidiaries being greater than $100m. The consideration was stated as to be advised. The vendors were eexisting shareholders of Crane Group Limited Australia (100%) The OIO states: "The Applicant and Crane are largely complimentary businesses. The acquisition will result in the extension of some significant business lines operated by Fletcher Building Limited. Crane is a building products manufacturing and distribution company consisting of three principal business units: Pipelines, Trade Distribution and Industrial Products".

Fletcher Building is the largest company in terms of market capitalisation listed on the NZ Stock Exchange. Fletchers had to improve their cash and script offer twice before winning over Crane shareholders. Apart from the OIO, they also had to satisfy the Commerce Commission and Australian regulators. While its takeover of Crane was initially viewed positively by investors and commentators, recent profit forecast downgrades suggest Fletchers' timing of their purchase could have been better, given the current downturn in the Australian building sector along with an already weak New Zealand building sector. See our October 2007 commentary for Fletchers' last significant purchase here, Dongwha Patinna NZ Limited.

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Singaporeans Now Counting Tegel's Chickens

Claris Investments Pte Ltd a Singapore incorporated company owned by three limited partnerships associated with Affinity Equity Partners received approval for the acquisition of rights or interests in 100% of the shares of NZ Poultry Enterprises Limited which owns or controls:

• a leasehold interest in 46.3 hectares of land at 243 Dunns Crossing Rd, Rolleston, Canterbury; and
• a freehold interest in four hectares of land at 464-476 Richmond Rd, Lepperton, North Taranaki; and
• a leasehold interest in 12.8 hectares of land at 757 Egmont Road, Hillsborough, Taranaki; and
• a freehold interest in 21.2 hectares of land at 485-517 Richmond Rd and 585 Manutahi Rd Lepperton; and
• a freehold interest in 21.6 hectares of land at 592 Richmond Road, New Plymouth; and
• a freehold interest in 3.5 hectares of land at 89-95 Tegal Rd and 250 Flanagan Rd, Drury, South Auckland; and
• a freehold interest in 4.1 hectares of land at 49-51 Manutahi Rd, Bell Block, New Plymouth.

Approval was also received for an overseas investment in significant business assets, being the Applicant's acquisition of rights or interests in 100% of the shares of NZ Poultry Enterprises Limited, the consideration of which exceeds $100m. Consideration was stated as confidential. The vendors were existing shareholders of NZ Poultry Enterprises Limited Pacific Equity Partners Pty Limited and related entities (43%), ANZ Entities including co-investors (30%), Tegel management, New Zealand (14%), Lujeta Pty Limited, Australia (10%), and Intermediate Capital Group, United Kingdom (except Isle of Man and the Channel Islands) (6%). (These are the percentages provided by the OIO and add up to 103%.)

The OIO states: "The Applicant proposes to acquire 100% of the shares in NZ Poultry Enterprises Limited (NZPEL). As NZPEL is the ultimate parent company of Tegel Foods Limited (Tegel), the acquisition of the shares will result in an indirect acquisition of Tegel by the Applicant. The Applicant aims to assist Tegel to reach its full potential through further expansion including expanding Tegel's product range". While the OIO did not reveal a price, several media outlets reported the deal to be worth around $600 million. The following was reported by the NZPA in the National Business Review (1/4/11):

"Singapore-based Claris Investments Pte says it wants to help New Zealand poultry producer Tegel Foods Ltd 'reach its full potential'. Claris is owned by three partnerships associated with Affinity Equity Partners, the private equity firm behind troubled clothing and footwear retailer Colorado Group. Colorado was put in receivership yesterday. The Affinity Equity partnerships which make up Claris have won OIO approval of their acquisition of Tegel parent company NZ Poultry Enterprises Ltd (NZPEL) for a reported $600 million. Tegel employs about 1550 workers.

"Pacific Equity Partners bought Tegel from HJ Heinz six years ago for $250m, after Tegel lost New Zealand's biggest chicken contract - to supply KFC fast food outlets - and its sales fell. Chicago-based Heinz originally bought the Tegel business in 1992 as part of its purchase of Goodman Fielder but sold it in a bid to quit underperforming businesses outside the United States. Pacific Equity still retains a 43% stake but the rest of Tegel's parent company is owned by Tegel management (14%), ANZ Entities (30%), Lujeta Pty Ltd in Australia, and British-based Intermediate Capital Group.

"Claris Investments said it 'aims to assist Tegel to reach its full potential through further expansion, including Tegel's product range'. NZPEL reported a tax paid profit of $22.6m for the year to Anzac Day, 2010, on revenue of $401.7m but has interest-bearing debt of $319.2m. Affinity's purchase is expected to be backed by Commonwealth Bank of Australia, Westpac, Macquarie Bank and Rabobank, which will replace the $300m in borrowings in place with BOS International, ANZ, Rabobank and Westpac".

According to Wikipedia, Affinity Equity Partners is one of the largest dedicated Asian private equity firms and focuses on leveraged buyout and growth capital transactions. Affinity invests primarily in companies that produce consumer-related goods and services as well as value-added manufacturing, healthcare, financial services, and business services companies. Affinity typically invests in companies based in the Asia Pacific region with a focus on Australia, Greater China, Hong Kong, Japan, Korea, Singapore and Taiwan.

Affinity was founded by Kok-Yew (KY) Tang and David Lai in 2002 The firm is headquartered in Hong Kong with offices in Seoul, South Korea, Singapore and Sydney, Australia. David Lai left Affinity in 2009. Meantime, some of the portfolio companies, including First Engineering and Jaya Holdings, had reported severe liquidity and cashflow issues". It seems from the above NZPA report that Australian-based Colorado Group can be added to that list of portfolio companies being sucked dry by Affinity. Does the same fate await Tegel? Given Affinity's track record, there must be some nervous chickens at Tegel!

According to Investinnz.co.nz: "Tegel has about 52% market share in New Zealand and also exports to Australia, which imports chicken only from New Zealand because of food safety reasons. Tegel is involved in the breeding, hatching, processing, marketing and distribution of poultry products across both the North and South Islands. Tegel offers a broad range of poultry products from fresh and frozen whole birds and portions to value-added main meal items. It supplies poultry products to supermarkets and other retail outlets in addition to servicing the needs of foodservice customers". See our March 2006 commentary for details of Pacific Equity Partners' (PEP) purchase of T egel from Heinz. See our February 2008 commentary for details of PEP's sell down of their stake in Tegel and our September 2008 commentary for details of their partial buyback.

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Swiss Buyer For Two Opotiki Forestry Blocks

In two separate Decisions, Monte Forestry Limited Christian Welte, Switzerland (100%) received approval to acquire a freehold interest in 1,629 hectares of land at Waiotahi Valley Road, Opotiki, and 432.6 hectares of land at Waiotahi Valley Road, Opotiki. The vendor of the first block was Camellia Project Limited as Trustee of the Camellia Trust Richard James Spicer, New Zealand (50%), and Pearl Janet Butler and Anthony Moore Andrew Ivanson, New Zealand (50%) and consideration was $3,037,500. The vendor of the second block was Kimiora Holdings Limited Bruce Raymond Dawson, New Zealand (100%), and the consideration was $787,500.

The OIO states with respect to both approvals: "The proposed acquisition will give effect to Mr Welte's investment strategy of establishing a long-term investment in natural resources outside Europe... Approximately 80% of the previous forest crop on the land and the adjoining forestry block has been harvested and is in a cutover state awaiting development. The tree crops on the remaining 20% of the land are owned by two third parties under forestry rights. These tree crops will be harvested over the next five years and the harvested land will be handed back to the Applicant. The Applicant intends to re-establish and maintain a productive pinus radiata forest on the land and the adjoining land. In total, approximately 1,500 hectares of pinus radiata forest will be re-established. Erosion prone and difficult harvesting areas will be allowed to naturally regenerate with native bush".

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Aussie Sells Down His Porters Ski Field Holding To The Russians

In another chapter of the controversial sale of Porters Ski Field and land swap with the Department of Conservation (DOC), PSA Capital Limited Simon Thomas Harvey, Australia (40%), Yuri Koropachinskiy, Russia (20%), Oleg Kirillov, Russia (20%), Yury Zelvenskiy, Russia (13.4%), and Vladimir Uchitll, Russia (6.6%) received approval for the acquisition of a leasehold/freehold interest in 708.2 hectares of land at the southern end of the Craigieburn Range. The vendor was Blackfish Limited Simon Thomas Harvey, Australia (100%). Consideration was $6,914,110.

The OIO states; "This is the latest in a series of applications for overseas investment consent in relation to the development of the Porters ski field business. The overseas investment will facilitate the ongoing development undertaken by the Blackfish Joint Venture since its acquisition of Porters in 2006". See our December 2006 commentary for details of Blackfish's original purchase of Porter Heights and December 2010 for details of Simon Harvey's purchase of Blackfish and the land swap with the Department of Conservation.

NZ Property Investor reported on the deal (5/4//11, Chris Hutching): "The mystery of who is funding a proposed $500 million ski field at Porter Heights, mid Canterbury, has been revealed. The visionary plan has raised eyebrows in the South Island because of its scale, even though Porter Heights is not near any centres of population. Previous lifestyle developments nearby have failed to ignite local investor enthusiasm. The scheme has required a controversial land swap with the Department of Conservation that was ratified a couple of weeks ago to the dismay of environmental interests.

"It transpires that the investors lined up for the development comprise a group of Russians who will invest $6.9 million in an interest in 708ha at the southern end of the Craigeburn Range, according to latest OIO Decisions.The Russians operate under PSA Capital. The vendor of the interest is developer Blackfish, whose main shareholder is Australian-based Simon Harvey. He is also a 40% shareholder in PSA Capital. Russian investors are also involved in the recent sale of Mt Potts Station which has been going through tenure review. The agent involved said he was bound by a confidentiality clause and could not divulge information".

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Previous Roger Award Finalist Buys Renwick Forest

Timbergrow Limited Tiong Thai King, Malaysia (65%), Tiong Family, Malaysia (20%), Tiong Hiew King, Malaysia (10%), and Tiong Ik King, Malaysia (5%) received approval for the acquisition of a freehold interest in 1,378.2 hectares of land at Renwick Forest, Marlborough. The vendor was Cambium New Zealand Holdings Limited Cambium Global Timberland Limited, United Kingdom (except Isle of Man and the Channel Islands) (100%). Consideration was $8,970,000.

The OIO states: "The land comprises a commercial forestry operation. The Applicant will continue to use the land and assets for forestry, and regards the Renwick Forest as a good long term investment". The Tiong family are better known here for other significant forestry investments via Ernslaw One Limited. See our commentaries for November and December 1994, September and October 1995, June, August and September 1996, February 2000, September 2004, May 2006 and March 2007 for details of other significant purchases here, that have resulted in the Tiongs becoming the fourth largest forestry owner in Aotearoa with over 100,000 hectares.

As reported previously in Watchdog, the Tiong family is one of Malaysia's most powerful and wealthy families. They own controversial rainforest logger, Rimbunan Hijau, newspapers and magazines. Details of their transgressions resulting in their most recent appearance as a Roger Award finalist are here. (Ernslaw One came third in the 2004 Roger Award).

In Aotearoa their interests extend well beyond forestry. They also own or owned:

• the Oregon Group;
• Salmond Smith Biolab (Artel Industries Ltd), a plastics and brushware operation; Biolab Scientific Ltd, Click Clack International Ltd, McDonald Dixbro Pty Ltd, Selby Scientific Ltd, Newman's Export, processors and marketers of berryfruit and owners of a sphagnum moss operation; the New Zealand and Australian business of Rhone-Poulenc Laboratory Products Australia, a scientific products group; Johns Plastics, (an Australian-based manufacturer of disposable plasticware) which, with its sister company Selby-Biolab in Australia, claims to have the largest scientific distribution network in Australasia;
• the New Zealand King Salmon Company Ltd (80% of New Zealand king salmon farming);
• Neil Construction (housing subdivisions);
• Ascot Management Corporation, which for some time had a minority interest in Force Corporation (cinemas); and
• Between 1995 and 1998 owned Talk Radio Bay of Plenty in Tauranga and Rotorua.

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BNZ To Invest In Christchurch CBD Red Zone?

The Bank of New Zealand National Australia bank Limited, Australia (100%) has received approval to acquire a leasehold interest in 0.4 hectares of land at 772 Colombo St, Christchurch. The vendor was Andrew Centre Limited Phillip Maurice Carter, New Zealand (50%), and Michael Joseph Ryan, New Zealand (50%). The OIO approval was dated February 28, six days after the devastating Christchurch earthquake. Consideration was a considerable $46,306,356, or $11,576 per sq metre. I say considerable because of the price paid and the deal is leasehold, not freehold. Moreover it is now in the red zone area of a devastated Christchurch CBD, whose future is far from certain. I somehow doubt this deal will now go through. The OIO states:"The Bank of New Zealand intends to lease approximately 0.4000 square metres, including associated car parks and ancillary facilities, on which it will construct its Christchurch head office. The building will incorporate part of the existing historic façade of the previous property located on the site" Only 0.4000 square metres? Either this is a mistake or BNZ is planning to build a very tall building (not a good idea in Christchurch) with the car parking reserved for staff Matchbox toys! Presumably it should read 0.4 hectares.

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Aussies Sell Kelly Tarlton

Merlin Entertainments Group Luxembourg Topco S.a.r.l Cayman Islands (29.8%), Denmark (31.6%), England (14%), and Luxembourg (24.6%) has received approval to acquire rights or interests in 100% of the shares of Auckland Aquarium Limited which owns or controls a leasehold interest in 0.005 hectares of land at 23 Tamaki Drive, Orakei, Auckland. The vendor was Village Roadshow Holdings Pty Limited Australia Public (81.1%), various overseas persons (6.8%), United States Public (5.6%), United Kingdom Public (3.9%), and Asia Public (2.6%); consideration was stated as confidential.

The OIO states: "The Applicant's acquisition (through its wholly owned subsidiary Merlin Entertainments [New Zealand Limited] of Auckland Aquarium Limited's shareholding is part of a series of transactions whereby the Applicant will acquire various assets in Australia and New Zealand from the Vendor. The Vendor has decided to realise some of its business assets in the Australasian attractions market in order to reduce its level of borrowings. The Applicant regards a number of the Vendor's assets as prominent tourism attractions in Australasia that are complementary to its core business". See our July 2008 commentary for details of Village Roadshow's purchase of Kelly Tarlton's Antarctic Encounter and Underwater World (Auckland Aquarium Limited) from Tourism Holdings Ltd.

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Roger Douglas And His Unpleasant Friends

Wharekauhau Country Estate Limited William P Foley II, United States of America (53.7%), New Zealand Public (25%), and Thomas M Hagerty, United States of America (21.3%) received approval to acquire:

• a freehold interest in 1.2 hectares of land at Wharekauhau Road, South Wairarapa; and
• a freehold interest in one hectare of land at Wharekauhau Road, South Wairarapa; and
• a freehold interest in one hectare of land at Wharekauhau Road, South Wairarapa.

Approval was also received for an overseas investment in sensitive land, being the Applicant's acquisition of rights or interests in up to 100% of the shares of Wharepapa Station Limited which owns or controls a freehold interest in 484.8 hectares of land at Wharepapa Station. Consideration was to be advised.

The vendors were Wharekauhau Holdings Limited James Davidson, United States of America (39%), Michael Baybak, United States of America (20.2%), Blanchard (James), III, estate of, United States of America (10.2%), Charlotte Casey, United States of America (8.8%), Lord William Rees-Mogg, United Kingdom (except Isle of Man and the Channel Islands) (8.8%), Annette Shaw, New Zealand (6%), William Shaw, New Zealand (6%), Roger Douglas, New Zealand (0.9%), and existing shareholders of Wharepapa Station Limited other than Wharekauhau Country Estate Limited Annette Shaw, New Zealand (23%), William Shaw, New Zealand (23%), Warren Mack Lindsey, New Zealand (18%), Marco Murillo, Japan (9%), Henry Gailliot, United States of America (9%), John Erdner, United States of America (9%), and Betty Wolfe, United States of America (9%).

The OIO states: "The Applicant (formerly named N&B Enterprises Limited) was granted consent in July 2010 to purchase the Wharekauhau Resort Business. This overseas investment transaction is an integral part of the overall investment and will facilitate the ongoing development of the Wharekauhau business operation". For further details regarding these properties, see our commentaries to previous Decisions in November 1995, June 1996, August 1996, January 1999, and July 2010. Also read Bill Rosenberg's "The Intriguing Story Of Roger Douglas And His Unpleasant Friends At Wharekauhau Lodge", Watchdog 84, May 1997. These associations provide evidence of Douglas's links with the far Right in the USA and UK.

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Other February Decisions

Grandy Lake Forest (NZ) Limited Eberhard Gemmingen, Germany (33.4%), Albrecht Gemmingen, Germany (33.3%), and Wolf-Eckart Gemmingen, Germany (33.3%) received approval to acquire a freehold interest in 491.3 hectares of land at 1881 SH2 (South) Wairoa. The vendor was Burnleigh Station Limited Jefferson Brownlee, Christopher Redmond and Maxwell Roswell, New Zealand (98%), Judith Mary Redmond, New Zealand (1%), Christopher O'Neill Redmond, New Zealand (1%); the consideration was $1,995,250.

According to the OIO: "The acquisition will be the Applicant's sixth forestry investment in New Zealand. The proposed transaction represents a continuation of the Applicant's investment in New Zealand. The Applicant proposes to establish a pinus radiata forest on the land. There will also be smaller areas of redwood and eucalyptus. The Applicant has identified New Zealand as a globally competitive producer of sustainably grown renewable softwood and has developed world class forest crops in the North Island's East Coast region. The Applicant seeks to couple its international experience and expertise with its local knowledge and network of contractors and service providers. The Investment is a further step towards developing an overall crop profile consistent with an annual harvest rotation".

The Gisborne Herald (5/10//11, Marianne Gillingham) reported on this and other sales in the area. "... in February, Grandy Lake Forest Ltd, privately owned by three German investors, bought its sixth farm in the East Coast region, at least four of them in Wairoa, with the acquisition of 491ha Burnleigh Station for $3.09m. The company began its local collection with a 6.16ha property in Cricklewood Road in 2008, for $2.2m. In 2010 it acquired 408ha Te Kohi Station and 275ha Ikanui, both near Wairoa, for $3.09m.

"Wairoa farming identity Jean Martin says at least one other Wairoa farm is going through the OIO approval process at the moment in what she believes is a growing wave of people jumping on the carbon credit train. The falling price of New Zealand carbon credits make her fear another boom and bust scenario, with good farming land locked up in the meantime and valuable farming skills lost to the country. Some of the sales had already resulted in some highly experienced farm managers losing their jobs, and with a growing number of hill country farms converted to pinus radiata, there was a shrinking pool of jobs for them, she said.

"The new trend was contributing to the loss of rural population, schools, country stores and other rural services. Income from these farms was no longer going into the service sector, which was having a significant impact on small towns like Wairoa. She said 30,000 stock units had already been lost to the Wairoa economy, which had not been offset by forestry production. The scary thing was that some of the best farms would eventually be sold to forestry interests, with the carbon credit incentive pushing up prices by about $100 a stock unit to around $500... " See our commentaries for July 2000, September 2001, July 2004, August 2005, July 2008 and July 2010 for details of Grandy Lake's other purchases here.

RHLNZ Limited Recreation Holdings Limited, United States of America (100%) received approval to acquire a freehold interest in 36.4 hectares of land at Wairoa Gorge, Nelson. Consideration was $480,000. The vendor was Robert Arthur Scott New Zealand (100%). The OIO states: "The Applicant has recently acquired adjoining land to develop into a mountain bike park with trails and a lodge for accommodation. This application increases the area of the mountain bike park so that more trails can be added. A New Zealand company, NZ Trail Solutions Limited, has been engaged by the Applicant to assist in managing the land, the entire trail building process, development, maintenance (including pest control) and other matters relating to the proposed accommodation lodge". See our May and September 2010 commentaries for details of other land purchases here by RHL NZ Limited.

Mataka Residents Association Incorporated New Zealand Public (56%), United Kingdom Public (23%), Switzerland Public (13%), Isle of Man Public (4%), and France Public (4%) received approval to acquire a freehold interest in 21.3 hectares of land at Purerua Peninsula, Bay of Islands. Consideration was $862,500; the vendor was Mataka Limited William Norman Birnie, New Zealand (100%). According to the OIO: "The Applicant is acquiring the land in order to secure the infrastructure required for the continuing development of Mataka Station. The overseas investment will provide ongoing benefits which include the creation of further jobs, improved public access and the enhancement of new and existing farming and conservation operations over the Station". Property sales at Mataka Station have regularly come up before the OIO. See our commentaries for December 2002, March, June and August 2003, January and December 2004, August and December 2005, June 2006 and August 2010.

Pinot Investments LP & TerraVin Holdings Limited TerraVin Wines Limited, New Zealand (45%), India Public (17%), Errol Desmond Clark, New Zealand (10%), Nick Watkins, United Kingdom (except Isle of Man and the Channel Islands) (7.5%), Horton Corporation Limited, New Zealand (7.5%), United Kingdom Public (4.7%), New Zealand Public (4.2%), Sweden Public (3.1%), Taiwan Public (0.8%), and various overseas persons (0.1%) received approval to acquire: a freehold interest and leasehold interest in 41.4 hectares of land at SH1, Seddon, Marlborough. The vendor was Cal Vin Limited New Zealand (100%), Pinot Investments LP India Public (56.8%), United Kingdom Public (15.5%), New Zealand Public (14.1%), Sweden Public (10.4%), Taiwan Public (2.8%), and Various overseas persons (0.4%), Consideration was $3,000,000. The OIO states:" Pinot LP intends to acquire a freehold estate in the land, and to immediately lease that to TerraVin on a long term basis. Following these transactions, TerraVin will be a wine producer with a focus on high end Pinot Noir and the development of a substantial export business".

And finally for February, a rare OIO decline. Craig Michael Roscoe South Africa (100%) was declined approval to acquire a freehold interest in 25.1 hectares of land at 137 Dodson Valley Rd, Nelson, for $1,875,000 from Calum MacLean New Zealand (100%). Apparently Roscoe no longer intends to live here in Aotearoa.

 

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