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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - August 2012 Decisions
Canadian Controlled Viterra Changes Hands
The most significant transaction by value for the month of August was 8115222 Canada Inc Glencore International Pls Jersey, Various (100%) receiving approval for the acquisition of rights or interests in 100% of the shares of Viterra Inc., the value of the assets of Viterra Inc. and its 25% or more subsidiaries being greater than $100m. The vendors were Existing shareholders of Viterra Inc. Canada (100%): the asset value was $229,204,579.The OIO states:
"Glencore is one of the world's leading commodity producing and marketing companies, with three principal areas of operations involving agricultural products, metals and minerals, and energy products. It seeks to purchase the shares of Viterra Inc., a Canadian listed company, which operates in grain handling and marketing, agri-products and processing. Viterra Inc. has a New Zealand subsidiary, Viterra (NZ) Limited, with assets of more than $100,000,000". See our July 2019 commentary for details of Viterra's takeover of ABB Grain ltd. Viterra is an international soft commodity trading transnational based in Calgary, Canada, and was formed from the merger of the Saskatchewan Wheat Pool and Agricore United. ABB owns well known rural serving companies, PCL Feeds and NZ Grain & Seed Ltd.
Back to TopNew Wind Farm For Taharoa
Goldwind International Holdings (HK) Limited, The Proprietors of Taharoa C Block and Taharoa Wind Energy Limited The Proprietors of Taharoa C Block, New Zealand (50%), various overseas persons (24.2%), Chinese Government, China, People's Republic of (15.3%), Hong Kong Interbank Clearing Limited, Hong Kong (SAR) (9.2%) and Belgium Public (1.3%) received approval for an investment in significant business assets, being the establishment of a business in New Zealand by the Applicant where the total expenditure required before commencing business exceeds $100m. The cost of establishing the business was stated at $110,000,000.
The OIO states: "The Applicants will establish a wind farm at Taharoa, near Kawhia Harbour, to generate electricity to sell into the national grid". According to the New Zealand Wind Energy Association, Taharoa C and PowerCoast have consent for a 27-turbine wind farm near Kawhia. The original application was lodged in late 2005, and consent was granted in August 2006. Appeals were resolved in April 2009. The wind farm could have up to 27 1.8 or 2 megawatt wind turbines, with a maximum generating capacity of 54 megawatts.
Back to TopChinese Grab Prime Gulf Harbour Development
Top Harbour Limited Zhaobai & Rose Jiang, China, People's Republic of (45%), Shanghai Zendai Property Limited, Hong Kong (SAR) (45%), Westlake Investments Limited, New Zealand (10%) received approval for an overseas investment in sensitive land, being the Applicant's acquisition of a freehold interest in 31.8 hectares of land at Gulf Harbour, Whangaparaoa. The consideration was $35,000,000; the vendor was Gulf Corporation Limited (In Receivership) & Gulf Corporation No.1 Limited (In Receivership) James Matthew Peters, New Zealand (100%)
The OIO states: "The Applicant intends to continue the development of a premier integrated coastal community in accordance with the Gulf Harbour District Plan. The new community will include more than 1,000 new homes along with a business centre, shops, cinemas, possible hotel/convention centre and a marina. The total cost of development over the next eight years is expected to be up to $550 million (excluding finance costs)". Zhaobai Jiang is better known to readers as the majority shareholder of Shanghai Pengxin, the eventual successful bidder for the Crafar Farms. Jiang made his fortune as a property developer and is these days one of China's wealthiest men.
Greg Ninness in the Sunday Star-Times reported background and details of this deal (16/6/12): "Allied Farmers and Bank of Scotland International look set to take a $121 million loss on the sale of the Gulf Harbour development north of Auckland when it is sold to interests associated with Jiang Zhaobai, the Chinese tycoon behind the company buying the Crafar farms. Jiang is buying both sets of properties out of receivership. While the price being paid for the Crafar dairy farms in the central North Island has not been revealed, the debt owed on the farms to a consortium of banks led by Westpac is $274m, according to the receivers.
"Gulf Harbour, a sprawling residential project being developed alongside a marina and golf course on the Whangaparaoa Peninsula, owes Bank of Scotland International (BOSI) $118m and Allied Farmers Investments $38m, according to its receiver, Tim Downes of Grant Thornton. Reliable sources have told the Sunday Star-Times that the property is being bought for $35m, although Downes would neither confirm nor deny the figure, which would mean that Allied Farmers as the second mortgagee would get nothing and BOSI would take a loss of at least $83m on the project. Allied acquired its mortgage on the property from Hanover Finance as part of a controversial capital restructuring.
"Jiang is one of China's wealthiest businessmen, with a net worth estimated by Forbes magazine at around $800m. His company Shanghai Pengxin Group is a multinational conglomerate with assets ranging from an extensive property portfolio in Asia to mining interests in Africa and agricultural companies. The purchase of Gulf Harbour is being arranged through Top Harbour Ltd, a New Zealand registered company set up by Auckland businessman Terry Lee, a close associate of Jiang. The two men are the co-directors of two other New Zealand companies, Nature Pure Ltd and Milk New Zealand Corporation Ltd.
"The Sunday Star-Times understands Top Harbour is backed by a syndicate of Chinese investors including Jiang, and that his interest in it is being overseen by one of its directors, Zhang Fuqiang, a Shanghai Pengxin executive. Under the deal, which is subject only to Overseas Investment Office (OIO) approval, Top Harbour will acquire the remaining 31ha of undeveloped land at Gulf Harbour, most of which is zoned for residential development with some commercial development possible along a harbourside strip known as Hobbs Wharf.
"Development work at the project has stalled since it went into receivership in December 2009, however work is likely to commence on the project reasonably quickly once the deal is settled, because Jiang's involvement means the development will not be reliant of bank funding. Downes said the new owners' access to capital meant they would be able to build homes and then promote them to buyers, rather than have to try and pre-sell a certain number off plan before banks would provide development funding. That would make the project more likely to succeed as buyers would see what they were getting. Downes said he was hopeful the OIO would approve the transaction shortly". See our December 2010 commentary for further background on Jiang.
Back to TopKoreans Buy 3,000 Hectare Forest In Marlborough
SCFNZ Limited Sunchang Corporation, South Korea (100%) has received approval for the acquisition of a freehold interest in 2,894.9 hectares of land in Marlborough. The vendor was RII Marlborough Limited Australian Public (41.3%), United States Public (33.6%), United Kingdom Public (18.4%) and various (6.7%); consideration was not revealed. The OIO states: "The Applicant is a subsidiary of Sunchang Corporation, a Korean listed company, which manufactures plywood, fibreboard and lumber for commercial and industrial purposes. The overseas investment will allow Sunchang Corporation to secure a portion of its demand for logs from its own forests and therefore control the quality of those logs". Apparently Sunchang has plans to add a further 2,000 hectares to their supply chain by 2015.
Back to TopMetlifecare Plans New Retirement Village For Albany
In two separate decisions Metlifecare Limited New Zealand Public (55.5%), Retirement Villages Group, Australia (43.2%) and various overseas persons (1.3%) received approval for acquisition of a freehold interest in 1.8 hectares of land at 125 Unsworth Drive, Unsworth Heights, Auckland, and secondly the acquisition of a freehold interest in 2.6 hectares of land at 147 Unsworth Drive, Unsworth Heights, Auckland. The vendor for the first land parcel was Assembly of God (Auckland Korean) Trust Board New Zealand (100%); consideration $4,479,825. The vendor for the second parcel was Neil Construction Limited Tiong Family, Malaysia (100%); consideration $6,459,425.
The OIO states: "Metlifecare Limited is a publicly listed company which owns and operates retirement villages throughout New Zealand. Metlifecare Limited is acquiring two adjoining properties in Albany (currently bare land) in order to establish a new retirement village". See our October 2005, February 2009 and July 2012 commentaries for details of other transactions involving Metlifecare. The second vendor, the Tiong Family has extensive land and forestry interests in New Zealand.
Back to TopNew Japanese Owner For The Mangapapa Petit Hotel
AG Mangapapa Investment Limited Shigeru Sato, Japan (69.4%) and Shinji Sato, Japan (30.6%) have received approval for the acquisition of a freehold interest in 9.7 hectares of land at Mangapapa Petit Hotel, located near Havelock North. The vendor was Able Real Estate (HK) Co. Limited Kunio Miyamoto, Japan (51%) and AU Oi Kwan, Hong Kong (51%) (I am not sure how there can be 102% ownership?); consideration was $4,500,000. The OIO states: "The Applicant intends to continue to operate Mangapapa Petit Hotel as a hotel and conference centre. The Applicant intends to improve the hotel facilities and increase the profile of the hotel with overseas visitors through the Applicant's Asian tourist industry connections".
Back to TopAmerican Consolidates Significant Canterbury Land Holdings
Calvin Pardee Erdman United States of America (100%) received approval for the acquisition of rights or interests in the remaining 50% of the shares of Annavale Limited which owns or controls a freehold interest in 2,688 hectares of land at Land at SH 73, Springfield, Canterbury. The vendor was Craig Leonard Heatley, Hayley Maree Pyle, Sophia Louise Heatley, Benjamin Alexander Heatley and Gregory Bernard Horton as trustees of the Bell Investment Trust New Zealand (100%); consideration was $3,408,497. By my calculations that is effectively just $2,536 per hectare.
The OIO states: "The Applicant obtained consent under the Overseas Investment Act 1973 to acquire up to 50% of the securities in Annavale Limited in October 2002. Annavale Limited owns approximately 2,688 hectares of land at SH 73, Springfield, which is run as a sheep and cattle farm. In addition to his current shareholding in Annavale, the Applicant also owns a 50% interest in Coleridge Downs Limited (CDL). The remaining shares in CDL are owned by the Applicant's sons, Christian Pardee Erdman and Sumner Pardee Erdman. CDL owns two substantial pastoral properties in Canterbury, known as Coleridge Downs and Dry Acheron.
The Coleridge Downs, Dry Acheron and Annavale properties have the potential to be run collaboratively and complement each other in a number of respects. The Coleridge Downs and Dry Acheron properties operate as "store stock" and "finishing" units where both beef and sheep stock is grown to a point where it can be processed. The Coleridge Downs and Dry Acheron operations currently purchase a significant number of stock units to "finish" on their properties and, in doing so, are subject to price fluctuations in the market for that stock.
The acquisition and development of Annavale to increase the number of stock units Annavale runs will better secure the supply of store stock to be finished at Coleridge Downs and Dry Acheron. Equally, Coleridge Downs and Dry Acheron will provide Annavale with a secure market into which they can sell the store stock they produce". See our commentaries for June 1994, April 1998, October 2002 and July 2005 for further details of Erdman's purchase of the above mentioned properties. Also see our April 2007 commentary for details of Erdman's purchase of the 1,285 hectare Dry Acheron Station. Heatley is better known to readers for his media interests including Sky TV.
Back to TopSingaporeans Buy The Hilton Hotel At Princes Wharf
Ambrosia Land Limited & Ewart NZ Management (No.2) Limited Singapore (100%) received approval to acquire a leasehold interest in approximately 1.5 hectares of land being the site of the Hilton Hotel located on Princes Wharf, Auckland. The vendor was Direct Property Investments (No.6) Limited, Princes Wharf Hotel Limited, Quay Street Leases Limited and Asteron Trust Services Limited New Zealand (100%); consideration was confidential. The OIO states: "The Applicant companies are owned by the Kum family, which invests in hotels in the Asia Pacific region. The Applicant intends to improve the Hilton Hotel performance through increased occupancy and higher use of banquet facilities using the Applicant's experience in the hotel sector".
Back to TopFoley Takes Control Of The NZ Wine Company
Foley Family Wines Holdings, New Zealand Limited (and associates that comprise the relevant overseas person's group) United States of America (at least 90%) and New Zealand and potentially other nationalities (not more than 10%) received approval for the acquisition of rights or interests in up to (and including) 90% of the ordinary shares of The New Zealand Wine Company Limited which owns or controls various freehold and leasehold interests in 149.5 hectares of sensitive land located in Marlborough (the Investment). The vendor was The New Zealand Wine Company Limited New Zealand Public (98%) and various overseas persons (2%); consideration was stated as cash and non-cash consideration equal to $48,114,541 for 80% of the ordinary shares of The New Zealand Wine Company Limited.
The OIO states: "The overseas investment transaction will result in a merger of the businesses of The New Zealand Wine Company Limited and Foley Family Wines NZ Limited. This merger will provide access to the Applicant's distribution networks (in the United States and elsewhere) and to further capital to secure current business operations and facilitate future growth of the merged businesses". Some of the consequences of Foleys purchase were reported by Cathie Bell in the Marlborough Express (27/2/13):
"Foley Family Wines NZ is looking to buy more vineyards in Marlborough, its Chairman says. American billionaire Bill Foley met shareholders and growers at a lunch at Grove Mill winery near Blenheim yesterday. Foley Family Wines merged with the NZ Wine Company last year, giving it control of the Grove Mill winery and brand. The company also owns Vavasour and Clifford Bay Wines in Marlborough , and Te Kairanga brands and Wharekauhau luxury lodge in the Wairarapa.
"Mr Foley said he was pleased with the investments. 'Despite a lot of redundancies, costs and legal fees, we made a small profit of $500,000. It's a big turnaround', he said of the six-month earnings released yesterday. The company's numbers indicated $280,000 had been paid in redundancies in the past six months. The scale of Grove Mill, Vavasour and Te Kairanga in the Wairarapa was 'really coming into play' and the company could get some mass behind its sales effort, he said. They would export one million cases of wine within the next few years, he said.
"The company intended to spend $2.6 million on the Grove Mill winery, including a new bottling line and a barrel storage room. This would be funded by cashflow, not borrowing. 'It's going to be a beautiful winery when we're finished'. Mr Foley said the company was focused on high producing vineyards in Marlborough . He wanted to increase the amount of fruit the company owned, rather than buy grapes on contract. It owned about 40% of what it processed now, and planned to increase that to about 66%.
"That meant buying 'a few hundred hectares of vines', he said. Increasingly, his company would focus on sauvignon blanc and pinot noir, with less focus on riesling and pinot gris, Mr Foley said. A potential Hawke's Bay venture would be into bordeaux blends, he said, but declined to give more details. Mr Foley said the exchange rate was tough. However, the company had increased sales to the United States by 22% this past year, despite the strong New Zealand dollar. 'Australia continues to be a very good market for us. New Zealand is growing for us. We're very confident. Britain is steady'.
"The United States would stop printing money in the next seven or eight months, Mr Foley said, which would weaken the Kiwi dollar against the American dollar. That would be very good for New Zealand in terms of exports, he said. However, the company had bought four presses at $75,000 each when they usually sold for $120,000. 'There, the exchange rate worked for us'. In a statement to the Stock Exchange, the company reported a 'considerable' turnaround, with an unaudited profit before interest of $1,193,000 compared with the 2011 result of the NZWC which had a loss before interest of $1,044,000.
"It said that, like all exporters, the exchange rate continued to erode margins and the company was concerned about the consequence for the industry as a whole with the enormous increase for the contract price for sauvignon blanc in 12 months. However, the board feels the company is extremely well placed going into the 2013 vintage. Mr Foley has made Te Kairanga Wines in Martinborough his New Zealand base". See our commentaries for October 2009, August 2011 and December 2011 for details of other vineyard purchases here by Foley.
Back to TopAussies To Establish Hokitika Treetop Walk
Hokitika Rimu Treetop Walk LP Shane Abel Family Trust, Australia (28.3%), Australian Public (26.3), Neil Wade Family Trust, Australia (20%), Viewpoint Investments Tasmania Pty Limited, Australia (9.9%), N Wade Family Trust #2, Australia (8.3%) and Netco Limited, Australia (7.2%) received approval for the acquisition of:
- a freehold interest in 9.2 hectares of land at Woodstock-Rimu Road, Hokitika; and
- a leasehold interest in 1.3 hectares of land at unregistered lease of parts of Part Rural Section 6031 and part Reserve 1056.
The vendors were Ray Carroll New Zealand (100%) and The Department of Conservation (DoC) The Crown, New Zealand (100%); consideration $200,000. The OIO states: "The Applicant seeks to create an elevated walk in the canopy of a rainforest in the Lake Mahinapua Scenic Reserve on the West Coast of New Zealand. This will provide visitors with a 450 metre long walk 20-30 metres off the ground. And New Zealand isn't the only country this fund is looking to buy into. As reported in the Meat Trade News Daily (4/4/12): "The foreign investment company that has plunged millions into acquiring a blue ribbon Northern Territory cattle holding has spoken for the first time on its reasons for making the purchase. Insight Investment has announced that Thames Pastoral Company Pty Ltd, the Australian subsidiary company of Insight Global Farmland Fund Ltd, has purchased Tanumbirini Station, a 5,001 square kilometre property located 420 kilometres south-west of Katherine. The acquisition of the perpetual pastoral lease includes about 28,000 head of mixed cattle.
"According to Reza Vishkai, head of Global Farmland at Insight Investment, advisor to Insight Global Farmland Fund Ltd: 'The Northern Territory has a comparative advantage for beef production due to its geographical proximity to export markets, the low intensity pasture based production system and the economies of scale. Tanumbirini presents a unique opportunity for Insight Global Farmland Fund Ltd. It is Thames Pastoral's intention to leverage the experience of local management, including the General Manager of Thames Pastoral, David Connolly (formerly Chief Operating Officer of the Australian Agricultural Company) to make investment in infrastructure, water and fencing to further develop a property which already has many excellent attributes.
"While the statement from Insight Investment did not disclose the purchase price, the transaction is believed to be in the order of $33 million, boosting confidence in the Top End's fragile live cattle export business and the NT's tough property market. Little is still known about the London-based buyer, which is entering the Australian cattle market for the first time. Speculation is rife that the investment company is now looking at additional properties in Australia and New Zealand to grow its Australasian portfolio..."
Back to TopOther August Decisions
Kirsten Biltoft Denmark received approval for the acquisition of a freehold interest in 40 hectares of land at 741 Hingarae Road, Kinloch. The consideration was $500,000; the vendors were Hingarae Developments Limited Christine Hickman, Australia (50%) and Gregory Hickman, Australia (50%). Ms Biltoft intends to reside indefinitely in New Zealand and is acquiring the property to reside on and operate her business from.
Middle Mount Limited Heinrich Martin Henny, Switzerland (100%) received approval for the acquisition of a freehold interest in approximately 52.2 hectares (subject to survey) of land located at Hangaroa, Gisborne (being part of Mangawehi Station). The vendor was Roger Dickie Developments Limited New Zealand (100%); consideration was $510,000. The OIO states: "The land strategically fits into the middle of two farms Middle Mount Ltd has already purchased (Avondale and Dumgoyne) which are now being run as one combined operation." Apart from the above mentioned purchase, Henni has been steadily buying up properties here in Aotearoa as the OIO indicates. See our commentaries for August and December 2006, September 2009, September 2010 and August 2011 for details of Henni's growing portfolio here.
Ernst & Daniela Schwarz Switzerland (100%) received approval for the acquisition of a freehold interest in 7.9 hectares of land at 402a Awhitu Central Road, Awhitu, Auckland. The vendor was Donald James Matheson & Joyce Barbara Matheson New Zealand (100%); consideration $900,000. Mr. and Mrs. Schwarz intend to move to and reside indefinitely in New Zealand. They intend to acquire the land to use as their principle place of residence.
Tedson Michael Caine & Julia Jean Caine United States of America (100%) received approval for the acquisition of a freehold interest in 4.8 hectares of land at 112 M Greenwood Road, Pakiri. The vendor was Pakiri Point Property Limited New Zealand (100%); consideration $4,500,000. Mr. and Mrs. Caine intend to move to and reside indefinitely in New Zealand.
And finally for August, Compagnie Vinicole Baron Edmond de Rothschild Winemakers Benjamin de Rothschild, France (100.0%) received approval for the acquisition of a freehold interest in 26.4 hectares of land at 200 & 256 Raparua Road, Marlborough. The vendor was Paul Family Company Limited Ursula Paul, New Zealand (100%); consideration $3,700,000. The OIO states: "The Applicant is acquiring the land to establish an ultra-premium single estate wine brand".
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