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Foreign investment in Aotearoa/New Zealand

Overseas Investment Office - Febuary 2018 Decisions

Horizon Buys Bigger Share Of Todd's Offshore Wells

Horizon Oil International Ltd (Australian Public 39.4%, Thailand Public 30.8%, various 26.85%, NZ Public 37%) a 10% partner in the Maari joint venture and its operating assets, has consent to acquire:

• a 16% interest in the Maari joint venture operation agreement for petroleum permits for the Maari and Manaia fields (Petroleum Exploration Permit 38143 and Petroleum Mining Permit 38160), located off-shore Taranaki:
• a 16% beneficial interest in the Maari joint venture assets: and
• proprietary rights in technical information relating to Petroleum Mining Permit 38160. This is an investment in significant business assets only and does not include sensitive land. The vendor is Todd Maari Ltd (The Todd Corporation Limited, NZ 100%), and the price is $150 million (gross).

The OIO states that Maari joint venture is a business relationship that owns and operates permits and petroleum assets related to the Maari and Manaia gas fields , offshore in the Taranaki Basin. The partners to that agreement are currently OMV New Zealand Ltd (69%), Todd Maari Ltd (16%), Horizon Oil International Ltd (10%), and Cue Energy Ltd (5%).

Horizon Oil International Limited is acquiring Todd Maari Ltd's 16% share and, once the transaction settles, will hold a 26% interest. The transaction relates to assets that exceed $100 million and for which in excess of $100 million has been paid. The OIO is satisfied that the individuals who will control the investment have the relevant business experience and acumen and are of good character and have demonstrated financial commitment to the investment. These operations and interest are based wholly offshore and do not involve sensitive land.

Seabed is listed as sensitive in Schedule 1 of the OIO Act (and of course we are all very sensitive about whales and Maui dolphins), but I guess they aren't required to purchase the seabed, they already have a mining licence. Maari is the oil platform for which OMV got various consents in 2014-5 (including from the new Environmental Protection Agency) to put in seven extra horizontal hydraulic wells. In 2010 Maari spilled oil onto Kapiti beaches, when someone forgot to put the bung in a tanker ship.

In December 2017 Offshore Energy.com reported a price of $17million, rather than $150 million, and funded from reserves and debt. Horizon's Chief Executive Officer (CEO) hoped that the larger interest will give Horizon Oil a greater say in the ongoing management of the fields, to maximise oil recovery and cost control. The acquisition would increase net operating cash flow from China and New Zealand to an expected average $60 - 70 million, enabling more rapid reduction of the company's net debt (https://www.offshoreenergytoday.com/horizon-takes-further-interest-in-maari-and-manaia-fields).

I can't find a Horizon Oil OIO consent for its first 10% of the joint venture, or any previous OIO consent related to Maari, so perhaps the business assets weren't significant at the time. See May 2016 and May 2014 for OIO consents involving Todd selling shares in the Maui gas pipeline to overseas interests. For the broader oil and gas picture, see Dennis Small's, "Primary Production, Free Trade, Resource Conflict & Corporate Plunder: Part 2", in Watchdog 129, April 2012, www.converge.org.nz/watchdog/29/11.htm.

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Australians Transfer NZ Vehicle Loans And Leases To Securitisation Trust

Eclipx Fleet Holding (NZ) Ltd (Australian Public 37.8%; HSBC Custody Nominees [Australia] Ltd, Australia 28.3%; JP Morgan Nominees Australia Ltd, Australia 18.1%; National Nominees Ltd, Australia 8.2%; Citicorp Nominees Pty Ltd, Australia 7.7%) has consent to acquire significant business assets exceeding $100 million in value, being various vehicle lease receivables and related vehicle assets, which, over time, may result in over $100m of receivables.

The vendor is Eclipx Leasing Finance (NZ) Ltd (Australian Public 37.8%, HSBC Custody Nominees (Australia) Ltd, Australia 28.3%) JP Morgan Nominees Australia Ltd, Australia 18.1%, National Nominees Ltd, Australia 8.2%, Citicorp Nominees Pty Ltd, Australia 7.7%). The OIO states that members of the Eclipx Group, acting through New Zealand subsidiaries, will transfer assets to NZGT (FP) Trustee Ltd as the trustee of the FP Ignition 2017 Warehouse Trust , a securitisation trust.

The assets are vehicle and loan receivables. Eclipx Leasing Finance (NZ) Ltd will be the sole beneficiary of the trust. Over time, the consideration paid will exceed $100 million. The OIO is satisfied that the individuals who will control the investment have the relevant business experience and acumen and are of good character. The Applicant has also demonstrated financial commitment to the investment.

Eclipz was known as Fleet Holding (NZ) Ltd from 2006 till August 2017. FP means Fleet Partners; NZGT is the Guardian Trust. A securitisation trust is a financial asset securitisation investment trust (FASIT) for non-mortgage debts with short maturities, such as car loans or credit cards. It allows finance companies to pool loans, spread risk, repackage and sell on, etc.

Think derivatives, think the 2008 global financial crisis. So, the Australian bit of Eclipx is going to move the ownership of revenues and risk from car loans and car leases to the NZ bit of Eclipz with the purpose of passing them on to the "GP Ignition 2017 Warehouse" bit of the Guardian Trust, which was subject in 2017 to a Moody's report I can't understand at all. But it's all about selling risk at a discount to someone else who thinks they'll make money out of it.

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