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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - November 2019 Decisions
This month, carbon farming and forestry, a rubber stamp for Woolworths and the latest takeover of oil and gas exploration.
Ministers Give Consent For First Drylandcarbon Forestry Carbon Farm
The Minister of Finance and the Associate Minister of Finance Drylandcarbon One Ltd Partnership (NZ Public 59.38%; Australian Public 14.4%; US Public 14.1%; various 12.2%) to acquire approximately 1,594.4614 ha. at 2775 Mangapoike Road, Wairoa, from Craigmore (Te Puna) Ltd (UK Public 59.4%; Asian/Pacific Public 17.4%; European Public 15.1%; NZ 6.6%; various overseas 1.5%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.
The Ministers state that Drylandcarbon One is a limited partnership established to hold a diverse forestry portfolio which plans to acquire sufficient land to plant 20 million trees in the next five years. It intends to plant up to 1,065 ha. in permanent forest to generate carbon credits for the NZ Emissions Trading Scheme. The land is currently used as a sheep and beef cattle farm, with small plantings of radiata pine and manuka. However, the land is erosion-prone and better suited to forestry.
Drylandcarbon will retain the 80 ha. of manuka and allow no less than 271 ha. to regenerate as indigenous vegetation and forest cover. Its plans align with the Government's climate change policy and the One Billion Trees strategy. Drylandcarbon has a significant level of NZ ownership, including Crown ownership and the NZ public, through shareholdings which include Air NZ, Z Energy, Contact Energy and Genesis Energy.
Drylandcarbon was formed in March 2019. Its Website says it is investing significant capital in a large geographically diversified forest portfolio to secure a long-term cost-effective supply of carbon credits (NZ Units) to meet the carbon liabilities of the above four companies (combined market capitalisation: $12.5 billion) under the Emissions Trading Scheme, complemented by rotation forestry for harvest. It offers partnership to landowners/farmers considering diversifying into carbon farming, thereby maintaining productive land and rural communities.
The Website lists what it sees as significant benefits to "NZ Inc". The limited liability partnership will be managed by Lewis Tucker & Co., an advisory and investment banking firm specialising in agribusiness and forestry. The Crown ownership mentioned in the consent summary is the post-privatisation part-ownership of Air NZ and of Contact and Genesis, our two largest electricity wholesalers and retailers. All companies are NZX listed.
NZ Herald (19/12/19) reports that the remaining 114 ha. of Te Puna will be leased to the current farm manager. Dryland has two other properties under contract and is considering more. It reports that the Productivity Commission's estimate of up to 2.8 million ha. needed for the Government's target of one billion extra trees over the next ten years to counter climate change has alarmed some farmer and forestry groups . But one billion is only 227 trees each - so let's start in our own backyards, everyone!
Back to TopCorisol Buys Another Farm For Forestry In Otago
Corisol NZ Ltd (Switzerland 100%) has consent to acquire approximately 489.365 ha. at 1949 George King Memorial Drive, Hindon, Otago, from Dochroyle Farming Ltd (NZ 100%), price withheld under s.9(2)(b)(ii) of the Official Information Act. The OIO states that Corisol applied under the special test for forestry activities in s.16A(4) of the Act. Corisol NZ is a subsidiary of a family-owned Swiss company, which has previously invested in NZ and has overseen forestry investments here since 2011.
Currently the land is used for forestry and sheep farming. Approximately 185 ha. is subject to a forestry right granted to the Ministry for Primary Industries which will carry on after this transaction. Corisol plans to develop the remainder as a commercial forest. It plans to plant in the winter of 2021, and will replant after harvest as part of normal commercial forestry operations. The investment aligns with Corisol's broader plans to create an appropriately scaled forestry business.
Corisol is No.15 of Radio NZ's list of top 50 landowners, with 18, 231 hectares in October 2019 (Stuff. It began in 2011 with forestry land purchased from Ngāi Tahu. See October 2019 commentary for OIO consent for 522 ha. in Otago and more detail about the company.
Back to TopNew Forests Fund Buys Mangaroa Forest Cutting Rights...
Norsewood Estate Ltd has consent to acquire a forestry right for approximately 198.26 ha. at 195D Whitemans Valley Road, Upper Hutt (Mangaroa Forest) from Integrated AG Ltd (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act. Norsewood Estate Ltd is owned by ANZFF3 Ltd which is wholly owned by ANZFOF3 NZ Pty Ltd which is ultimately owned by The Trust Company (Australia) Ltd as trustee for the New Forests Australia New Zealand Forest Operating Fund 3 which is wholly owned by certain overseas investment funds. The New Forests Australia New Zealand Forest Operating Fund 3 is managed by New Forests Asset Management Pty Ltd.
The OIO states that the applicant has applied under the special test for forestry activities in s. 16A(4) of the Act. The investment generally relates to 422.8 ha. but provides Norsewood with cutting rights over a total of approximately 198.26 ha which is the productive stocked area of the land. The existing forestry is mixed age pinus radiata. Norsewood intends to harvest the existing crop, after which the land will be handed back to the vendor. The cutting right does not allow Norsewood to replant after harvest.oors (above ground) without chemical treatment. Supply from the western US does not meet current demand.
Back to Top...And Forest, Cutting Rights And Snails In Levin...
Norsewood Estate Ltd (has consent to acquire approximately 478.1968 ha. at Kohitere Forest near Denton Road, Levin, including a forestry right over approximately 23.2 hectares. See above for Norsewood ownership and management. The vendor is Forestry Fund 9 NZ Ltd (US Public 59.8%; UK Public 27.2%; Cayman Islands Public 8.7%; Canada Public 3.9%; British Virgin Islands Public 0.4%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.
Norsewood Estate has applied under the special test for forestry activities in s. 16A(4) of the Act. The land will continue to be used for existing commercial forestry operations. Norsewood's investment plans also include seeking Forest Stewardship Council certification and managing the land in accordance with best practices; continuing to provide public access; and continuing to protect the habitat of indigenous snails on the land.
There are existing conditions of consent and various existing arrangements that are for specified purposes set out in regulation 29, including conditions and arrangements related to providing public access and protecting the habitat of indigenous fauna. Conditions of consent have been imposed to ensure that Special Forestry Test requirements are met, including requiring the Applicant to continue to implement and maintain existing conditions and existing arrangements.
Back to TopKauri Forestry/Craigmore Buys Land For Forest Conversion In Northland
Kauri Forestry LP (Switzerland 93%; Germany 7%) has consent to acquire 488.5360 ha. at 481 Moore Road, Pipiwai, Northland, from Alexander James Moore, Sharyn Kaye Moore and YHPJ Trustees (2018) Ltd (as trustees of the Wairere Trust) (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act. The OIO states that Kauri Forestry has applied under the special test for forestry activities in s.16A(4) of the Act. The land is currently approximately 285 ha. used for farming operation, an existing forest of 154 ha., and the remaining 47 ha. in non-productive native bush including riparian planting. Kauri intends to plant 235 ha. in pinus radiata and retain the existing forestry and native bush.
The OIO states that this 309.61 hectares is part of 375.9 ha. which is being subdivided by the vendor. Approximately 249 ha. are currently used for farming. Kauri Forestry intends to plant 223 ha. and retain 42 ha. in native bush. The balance of 44 ha. is not suitable for forestry (ridges, gullies and setbacks, roading and tracks, and non-productive scrub areas).
Approximately 50 ha. are not suitable for planting (steep ridges, gullies, roading and tracks, and non-productive scrub areas). The land contains a dwelling, seven farm buildings and a shearers' quarters. Kauri does not intend to use any of these buildings for residential purposes and may choose to dismantle structures or subdivide off these portions in the future. The OIO was satisfied the Investment met the requirements of the special forestry test. Kauri Forestry is Craigmore plus Swiss/German money. See last month for its consents for a forestry conversion of farmland near Whangarei, another Northland forest in June 2019 and one in the Wairarapa in July 2019.
Back to Top...And Tregoweth Forest, Benneydale, King Country
Zentral Estate Ltd has consent to acquire 345.7364 ha. at 102 Waimiha Road, Benneydale, King Country (Tregoweth Forest) from QIC Strategy Timber No.1 Ltd (Australia 100.0%). Price withheld under s.9(2)(b)(ii) of the Official Information Act. Zentral Estate Ltd is owned by by ANZFF3 Ltd which is wholly owned by ANZFOF3 NZ Pty Ltd which is ultimately owned by The Trust Company (Australia) Ltd as trustee for the New Forests Australia NZ Forest Operating Fund 3 which is wholly owned by certain overseas investment funds. The New Forests Australia NZ Forest Operating Fund 3 is managed by New Forests Asset Management Pty Ltd.
The OIO states that the applicant has applied under the special test for forestry activities in s.16A(4) of the Act. The land is already a commercial forest with 240 ha. in mixed age tree stock. The remainder is 70.86 ha. of indigenous vegetation, six ha. of road and tracks and 30 ha. of non-productive areas. If used by Zentral Estate, the two dwellings on the Land will be for temporary and short-term forestry worker accommodation. Zentral Estate intends to harvest the existing crop of trees and replant.
New Forests Asset Management was listed by RNZ (17/10/19) as No.3 of NZ's 50 largest landowners (77.465 ha.), starting in the Wairarapa in 2016 and acting through subsidiaries with regional "Estate" names, including Norsewood, Marberry, Blenheim, Zentral. See June 2019 for Wairarapa and Marlborough land purchased under the Norsewood Estate name. RNZ notes an OIO investigation into one subsidiary's purchases resulted in a formal warning, an $80,000 charity donation and $20,000 in costs.
Back to TopWoolworths Gets A Rubber Stamp
General Distributors Ltd and Wholesale Distributors Ltd (Australian Public 99.45%; various 0.55%) has a standing consent for overseas investment in yet to be identified residential (but not otherwise sensitive) land, granted under ss. 12 and 23A of the Act. The OIO states that the applicants are part of Woolworths Group, one of NZ's largest supermarket operators, and are asset-holding vehicles for Countdown, Fresh Choice and Super Value supermarkets.
This standing consent under Sch. 4(2) of the Act has been granted in accordance with the non-residential use test set out in Sch.2(13). Residential but not otherwise sensitive land acquired under this standing consent will be used for development and operation of supermarkets (in some cases together with ancillary retail and/or commercial premises); or development and operation of facilities in support of the supermarket business; in the ordinary course of business. This standing consent will permit them to acquire up to 75 ha. of yet to be identified sensitive land and a maximum of ten transactions by 1 December 2022. The OIO must be notified each time a transaction is settled.
Back to TopIsraeli Billionaire Takeover Of Oil & Gas Exploration
OG Oil & Gas (Singapore) Pte. Ltd (Eyal Ofer, Israel 100%) has consent to acquire significant business assets and sensitive land, being an increase of its shareholding in NZ Oil & Gas Ltd from 70% up to 100%. NZ Oil & Gas Ltd has a 4% stake in the joint venture that owns approximately 200 ha. at the Kupe Production Station. The vendors are the existing shareholders of NZ Oil & Gas Ltd (Singapore Public 69.9%; NZ Public 26.9%; Australian Public 2.6%; various overseas 0.6%) and the price is $36,670,479.
The OIO states that OG Oil & Gas Singapore is part of the Ofer Global Group, which operates in shipping, offshore floating production, storage, and offloading platforms, commercial real estate, banking and finance, and other associated services. It currently owns just under 70% of NZ Oil & Gas Ltd, a petrol and gas exploration and production company. This consent will allow its takeover bid to proceed, which it has until 30 October 2020 to complete, subject to shareholder acceptance. The OIO notes that it will then own 4% of the joint venture owning the 200 ha, having therefore minimal ability to exercise control over the land.
Well, the consent is significant business interests, not just land. For Ofer's 70% takeover of NZ Oil & Gas, and interests in the Kupe oil field, see commentary of December 2017. See also January 2016 for NZ O&G's sale of its minority stakes in the Kupe oilfield to Genesis and in the Tui oilfield to end-of-production-life extraction specialist Tamarind.
Tamarind also owned Amoku and Pateke when it went bust in late 2019 (Oil & Gas Journal, 18/11/19), with calls for a Government bail-out (RNZ, 16/1/20).
Wikipedia describes Eyal Ofer as an Israeli Monaco-based (i.e. tax haven) billionaire from real estate and shipping. Through OG Oil & Gas, an arm of Ofer Global's OG Energy division, he has exploration and production interests in Australasia and South East Asia. In October 2018, OG Energy acquired 40% of Beach Energy's Otway Basin assets off south east Australia. Ofer is also the principal of OMNI Offshore Terminals, the largest provider of floating production storage and offloading (FSO & FPSO) assets to the offshore oil and gas industry. NZ oil pumped into these kinds of vessels goes straight off to overseas refineries so NZ can buy some back again at international prices.
Back to TopGriffins Part Of Joint German/Filipino Snack Attack On Oceania
Intersnack International BV (Germany Public 88.5%; Switzerland Public 5.9%; Italian Public 2.3%; UK Public 1.2%; Belgium Public 1.2%; Various 0.9%) has consent to acquire up to 49% of Unisnack Hold Co Pty Ltd from URC Oceania Company Ltd, the value of the NZ assets and its 25% or more subsidiaries being greater than $100m. The vendor is URC Oceania Company Ltd (JG Summit Holdings Inc, Philippines 55.1%; various 32.6%; Philippines Public 11.3%; Australian Public 1.05%) and the price $811,393,000.
The OIO states that German-owned Intersnack International is registered in the Netherlands. The Intersnack group manufactures, markets and sells savoury snacks, focusing on the European market, with brands such as Chio and POM-BÄR. The target of the takeover, Unisnack, is a subsidiary of Universal Robina Corporation, a large branded consumer food and beverage company registered and publicly listed in the Philippines.
The URC Group owns snack manufacturing operations and subsidiaries in Australia and NZ under the brands Australia and Griffins Foods. URC Oceania and Intersnack intend to build a joint-venture entity comprising companies of both groups, in order to further develop their snack businesses in the Oceania region. Intersnack has satisfied the OIO that the individuals who will control the investment have the relevant business experience and acumen, and are of good character, and Intersnack has demonstrated financial commitment to the deal.
Food Ingredients (8/7/19.html) reports that this partnership deal, involving 40% of URB's Australian and NZ business for a mix of cash and shares, was completed through URC's subsidiary in the British Virgin Islands. Note that the Netherlands also has a tax haven/secrecy regime (Murphy, Dirty Secrets, 2017 p.57).
Intersnack is a private company that is the savoury snack leader in European markets. It operates in 24 countries, generating net sales of around $US3 billion a year. Prior to this deal, its only Australasian presence was Yarrah Valley natural snacks which it acquired as part of its purchase of UK crisp maker Tyrrells from Hersey's in 2018 (Hyslop, 10/7/19). Griffins began as a biscuit company in Nelson in 1854, but has had a series of overseas owners since 1962.
In 2014, Robina acquired Griffin's Foods for $609 million from Australian private equity firm Pacific Equity Partners - see commentary of October 2014. PEP got it from Duone - see commentary of May 2006. URC Oceania and Universal Robina are led by Filipino billionaire John Lim Gokongwei Jr. who began Robina from a corn starch and glucose mill after WW2. The Gokongwei family controls over $US20 billion of combined market capitalisation of the companies they own.
Back to TopHarmoney Has Marketised Your Peer-To-Peer Loan
Summerset Holdings Ltd (NZ Public 77.6%; US Public 9.8%; various overseas persons 12.7%) has consent to acquire approximately 14 ha. at 141 South Belt and 104 Townsend Road, Rangiora from Murray Allan Clarke, Janine Louise Clarke, Lesa May Clarke and Williams & McKenzie Trustees Ltd (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.
Harmoney Corp Ltd (NZ Public 36.3%; Neil Gordon Roberts, NZ 30.8%; UK Public 22.9%; US Public 7.7%; Australian Public 2.3%) has consent for financial transactions, involving significant business assets valued at more than $100m, under an existing securitisation programme entered into in December 2018. The vendors are Harmoney Nominee Ltd (NZ Public 36.3%; Neil Gordon Roberts, NZ 30.8%; UK Public 22.9%; US Public 7.7%; Australian Public 2.3%) and Harmoney Services Ltd (NZ Public 36.3%; Neil Gordon Roberts, NZ 30.8%; UK Public 22.9%; US Public 7.7%; Australian Public 2.3%).
The OIO states that Harmoney Corp is the ultimate holding company of a number of subsidiaries who conduct the Harmoney business, acting as a marketplace for peer-to-peer lending allowing lenders to loan money to borrowers for a range of purposes. Harmoney now expects the value of the financial assets that comprise the securitisation to exceed $100 million, and, since entering into the programme, has become an overseas "person". Harmoney has satisfied the OIO 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.
"Securitisation" is the process whereby financiers parcel up various loans/debts/mortgages, slice them thin, then sell the tranches to other people as investments, thereby getting the risks off their own books. Think 2008 Global Financial Meltdown, etc. (Kay, Other People's Money, 2015). You've seen those Harmoney peer-lending ads on TV. If you thought those ordinary Kiwis lending each other money was sweet and some kind of different, now you know it's not.
Back to Top
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.