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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - May 2016 Decisions
Shell Sells Maui Pipeline To Aussies
As predicted in our April 2016 commentary, First Gas Holdings Limited. Australian public (63%), Canadian public (34%) and various overseas persons (3%) received approval for the acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, that property being the acquisition of the Maui Pipeline and related assets. The vendor was Maui Development Limited, Royal Dutch Shell plc, United Kingdom (84%), OMV Aktiengesellschaft, Austria (10%) and the Todd Corporation Limited, New Zealand (6%); consideration was $335,000,000
The OIO states: “The Applicant will acquire the Maui Pipeline and related assets through its 100% subsidiary First Gas Limited. First Gas Limited (formerly known as Vector Gas Limited) currently operates a major North Island gas transmission and distribution network and is a leading provider of pipeline management services to third party pipeline owners”. As reported in April, First Gas Holdings bought Vector gas which already manages this pipeline.
Helen Harvey at www.stuff.co.nz reports on the deal (15/6/16): “The Maui pipeline has been bought by First Gas Limited for $335 million. First State Funds, the owners of First Gas Limited, bought the gas pipeline from the Maui mining companies - Shell, Todd and OMV. The Maui pipeline is New Zealand's largest high pressure transmission pipeline and runs from the Oaonui production station south of New Plymouth to the Huntly power station south of Auckland”.
“First Gas interim Chief Executive, Richard Krogh, said the Maui pipeline was a significant energy infrastructure asset transporting around 78% of all natural gas produced in New Zealand. The 307km pipeline will be operated by First Gas, which also operates the former gas transmission and distribution network owned by Vector Gas Limited (VGL), he said”. ‘In purchasing the Maui pipeline, in addition to the VGL gas network, First Gas will own and operate New Zealand's most significant gas transmission and distribution network’".
“First Gas is currently the system operator and technical operator of the Maui pipeline and it will now take on the role of commercial operator. ‘With the commercial operation staff and facilities being engaged by First Gas, the company will continue to build on an experienced team operating a vital energy infrastructure asset for New Zealand’, Krogh said. The combined network will comprise 2,500 km of high pressure gas transmission pipelines and stations that supply natural gas from Taranaki to industrial consumers throughout the North Island, as well as 4,800 kms of distribution pipelines in Northland, Waikato, the Bay of Plenty, the Central Plateau and the Kapiti Coast servicing more than 60,000 end customers”.
“Shell New Zealand Chairman, Rob Jager, said the Maui natural gas pipeline had been operating successfully for nearly four decades. ‘And whilst built exclusively for the Maui natural gas field, it is now a key infrastructure asset in transporting natural gas north, from many gas fields in Taranaki. We are delighted that such an important asset in this country's energy infrastructure will be managed by First State Investments, a leading global infrastructure asset manager with strong expertise in this area’.The pipeline was built in the 1970s to deliver gas from the Maui natural gas field. Since 2005, after an open access regime was established, the pipeline has transported gas from multiple gas fields creating a successful standalone pipeline business”.
Back to TopJapanese Sell Southland Forestry Block To Battling Bathurst
Bathurst Resources Limited, Singapore public (32%), Australian public (21.8%), Republic Investment Management Pte Limited, Singapore (18.4%), New Zealand public (18.2%), Asian Dragon Acquisitions Limited, Singapore (6.6%) and various overseas persons (3%), received approval for the acquisition of a freehold interest in approximately 85 hectares of land at 66 Friskin Road, Tinkertown, Nightcaps, Southland.
The vendor was Southland Plantation Forest Company of New Zealand Limited, Oji Holdings Corporation, Japan (51%), ITOCHU Corporation, Japan (30%) and Fuji Xerox Co Limited, Japan (19%); consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO states: “The Applicant is a coal mining company that operates exclusively in the South Island, and currently employs over 110 people in New Zealand with its head office in Wellington. In total, the Applicant has spent in excess of $NZ420 million on its New Zealand activities since its establishment in 2010”.
“The Land is currently part of a wider, semi-mature forestry block. Acquisition of the Land will enable the Applicant to continue mining along the strike of the coal seams from the Applicant’s adjacent Coaldale mine which is close to being economically exhausted. The opencast coal mine on the Land will be known as the Black Diamond mine. The development and operation of the Black Diamond mine on the Land will result in the retention of a significant number of jobs as well as the creation and retention of a considerable number of indirect jobs”.
Simon Hartley at the Otago Daily Times reports further (1/7/16): “Beleaguered West Coast coal miner Bathurst Resources has gained regulatory approval to buy 85ha of Southland forestry land next to its Coaldale mine at Nightcaps. The OIO yesterday granted approval for Bathurst's freehold purchase of the 85ha at Nightcaps from Southland Plantation Forest Company of New Zealand Ltd, whose majority owner is Oji Holdings Corporation of Japan. The OIO did not disclose the purchase price”.
“In a convertible notes issue in April, Bathurst raised $A4.25million ($NZ4.45million) for working capital. For its last quarter of production, to March, Bathurst reported a ‘cash positive quarter’, having mined 105,287 tonnes of coal ‘with restricted deposits’' at $6.2million, up on the previous quarter's $5.6million. The company said at the time 400,000 tonnes of annual production would ‘provide a sound revenue stream to underpin the company's operations'. Its shares were trading at 1.3c yesterday”.
“Analysts had been speculating Bathurst might have been looking at some permitted areas of Solid Energy, which included specialist hard coking coal areas. Bathurst has spent more than $400 million since 2010 on gaining permits and consents and on some development costs for a new West Coast mine near Westport, initially targeting four million tonnes in annual production. However, after fighting environmentalists' challenges through the courts to have two councils' consents upheld, by the time those battles were won in October 2013, the price of export coking oal had tanked worldwide and Bathurst could not mine the export coal commercially”.
“Bathurst has since then relied on two small thermal coal mines, Takitimu in Southland and another west of Christchurch, supplying a now closed West Coast cement factory and the dairy industry. The OIO said the Southland land was part of a wider, semi-mature forestry block. The purchase would allow Bathurst to continue mining a coal seam stretching from the Coaldale mine into the forestry block, which has been named the Black Diamond mine”.
“Bathurst's adjacent Coaldale mine was ‘close to being economically exhausted', the OIO said yesterday. The OIO said Bathurst employed about 110 people in New Zealand and development of the Black Diamond mine would mean the creation and retention of ‘a significant number’ of jobs and indirect jobs. In March, Bathurst suspended operations at its contentious Escarpment Mine atop the Denniston Plateau, above Westport, and had to rely on the southern domestic mines to maintain cash flow. Deep cuts have been made to staff, management and the board and Bathurst has moved its Stock Exchange listing solely to the ASX in order to conserve cash”. See our October 2010, March 2011 July 2012 and October and December 2013 commentaries for details of Bathurst's original purchase of mining interests in Aotearoa.
Back to TopAussie Ownership Of NZ Panels Group Restructured
ArcPac Building Products Limited, Crescent Capital Partners IV, LP, Australia (49.1%), CCP Trusco 1 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVA, Australia (18.8%), Australian Public (12.5%), CCP Trusco 3 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVC, Australia (10.7%) and CCP Trusco 2 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVB, Australia (8.9%), received approval for the acquisition of rights or interests in 100% of the shares of New Zealand Panels Group Limited, the consideration of which was expected to exceed $100m.
The vendors were existing shareholders of New Zealand Panels Group Limited, Crescent Capital Partners IV, LP, Australia (39.3%), CCP Trusco 1 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVA, Australia (15%), CCP Trusco 3 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVC, Australia (8.6%), CCP Trusco 2 Pty Limited as trustee for Crescent Capital Partners Specific Trust IVB, Australia (7.1%) and New Zealand public (30%): consideration was not finalised but was expected to exceed $NZ100 million.
The OIO states: “The Applicant was to acquire its interest in New Zealand Panels Group Limited through its 100% subsidiary, Breezway Bidco Pty Ltd. New Zealand Panels Group Limited comprises of a variety of business units which make specialist interior decorative products including panels, benchtops, drawers and doors. The investment was to be undertaken at the time of, and in connection with, a proposed share issue and listing of the Applicant on the ASX. The proposed share issue and listing did not proceed”.
Back to TopConfidential Decision
Apart from the Decision Number 20161003 and the fact the application was granted as the overseas investment transaction has satisfied the criteria in section 18 of the Overseas Investment Act 2005, everything else relating to this approval has been suppressed.
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