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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - December 2019 Decisions
Wilmar Buy-Out Of Joint Venture Partner Goodman Fielder Includes Pūhoi cheese
The Minister for Land Information and the Associate Minister of Finance have granted consent to Wilmar International Ltd (Singapore Public 30.7%, Malaysian Public 19.8%, British Virgin Islands Public 15.6%, Hong Kong Public 14.9%, Kuok Khoon Hong, Singapore 12.6%, Cayman Islands Public 5.8%, various 0.6%) to acquire 100% of shares in FPW Singapore Holdings Pte Ltd which has 23.5901 ha. at 273 Ahuroa Road, Makarau, from Oceanica Developments Ltd (Hong Kong Public 47.8%, Anthoni Salim, Indonesia 44.3%, Brandes Investment Partners, USA 7.9%), for between US$275 million and US$325 million depending on certain contingencies.
The Ministers state that Wilmar, a Singaporean listed company, intends to increase its existing 50% ownership of FPW Singapore Pte. Ltd. to up to 100%. FPW holds interests in Goodman Fielder (NZ) Ltd through its 100% ownership of Goodman Fielder Ltd, a food manufacturing, marketing and distribution company with operations across Australia, NZ and Asia Pacific. Wilmar initially acquired 50% of FPW in 2014, and subsequently invested in the Goodman Field NZ business. Wilmar seeks to acquire the remaining 50% of FPW in order to take Goodman Fielder Ltd out of the joint venture with Oceanica so that it can realise the benefit of further capital contributions.
Wilmar has committed to at least $12 million worth of capital investment in NZ including alterations of current milk processing facilities, new equipment to improve cleaning and waste reduction, automated receipting, packing and filling equipment, and an increase in storage capacity. Wilmar also intends to use its existing overseas distribution networks to increase export receipts. Wilmar has agreed to work with community groups to connect walking trails in the Puhoi Valley area, and to consult with Puhoi Valley Landcare and Forest Bridge Trust to implement pest control measures at their Puhoi Valley cheese factory site.
The Pūhoi Cheese factory site is at 275 Ahuroa Rd, Pūhoi (close to Orewa); Makarau is an area traversed by Ahuroa Valley Road half an hour away on the Kaipara side. Singapore Business (12/3/19) reports that the Wilmar deal will go through for $US180m cash, with Wilmar also buying shareholder loans worth $US95m and a possible further $US50m to Oceanica after 2020. It notes the $US275-325 million estimate is 28-29% lower than Wilmar's book value on its first 50% share, and represents 1.7-2% of Wilmar's shareholders' funds.
Details of the deal dated 11/3/19 are provided by First Pacific. The Australian Financial Review reported that First Pacific would incur an almost $A400 million loss on its 50% stake in Goodman Fielder, even though its underlying profits had grown over the past four years (Sue Mitchell, 12/3/19)
See November 2005 commentary on Bredgar Investments' (Graeme Hart) sale of NZ Dairy Foods, including 275 Ahuroa Rd, to Goodman Fielder, a subsidiary of a subsidiary of Burns, Philp & Company Ltd. See February 2015 for Wilmar and First Pacific Co Ltd together buying up 100% of Goodman Fielder shares (for $US1 billion, then delisted it) - the vendor in the above deal, Oceanica, is an indirectly wholly-owned subsidiary of First Pacific. See also December 2019 for Wilmar's consent to acquire Sucrogen, Australia and NZ's largest sugar refiner, and general background on Wilmar and its other agribusiness holdings.
Back to TopAMP Equity Fund To Buy 40% Of Wiri Prison Public Private Partnership
AMP Capital Funds Management Ltd (Australian Public 85%, various 15%) has consent to acquire significant business assets, being 40% of SecureFuture Wiri Holdings Ltd,the value of the assets of SecureFuture Wiri Holdings Ltd and its 25% or more subsidiaries, and a 40% share in SecureFuture Wiri Holdings Ltd's lease of 20.1529 ha. at Wiri, South Auckland, from InfraRed Infrastructure (NZ) BV (Hong Kong Public 35.1%; UK Public 25.5%, Swiss Public 8.4%, Canadian Public 8.2%, South Korean Public 6.7%, Swedish Public 6.2%, various 10%). Price withheld under s.9(2)(b)(ii) of the Official Information Act.
The OIO states that AMP Capital Fund Management intends to acquire up to 40% of the shares in the company operating the Kohuora Auckland South Corrections Facility. The prison is operated as a public private partnership with the Department of Corrections. InfraRed helped construct the Prison and now wishes to reinvest elsewhere. The AMP fund is a secondary investor, who has entered into the PPP at the management and oversight phase of the project.
The PPP requires the operating company to deliver operational services at the prison for a 25-year term, after which the responsibility and the associated lease reverts to the Crown. The OIO states that allowing the AMP fund as a secondary investor is likely to promote the Government's PPP strategy including secondary sell-down transactions, and considers it likely to be in New Zealand's economic interest to have the PPP model working in a way that encourages additional investment. AMP Capital Funds Management Ltd has also been vetted by the Department of Corrections.
The Kohuora Auckland South Corrections Facility at Wiri is a high security men's prison for up to 960 prisoners, opened in May 2015 under a 25-year public-private partnership (PPP) arrangement with the Department of Corrections. SecureFuture Wiri, owned by InfraRed Capital Partners, John Laing Investments and the Accident Compensation Corporation, won the contract (see June 2012 for OIO consent), and subcontracted Fletcher Building to design and build the prison, Spotless to maintain it, and Serco to operate it for around $33-$34m a year.
See NBR (Jonathan Underhill, 4/12/17) on the profits involved. Serco had a 10% stake in SecureFuture which it sold to InfraRed in 2016. Serco was Runner-Up for the 2015 Roger Award.
A 2016 Corrections Department report ranked it lowest among prisons and required operating changes; Serco had already lost its contract to run the Mt Eden remand prison. So, more of a headache than a support for this Government. Infrared Capital Partners is a global investment manager focused on infrastructure and real estate, with offices in London, New York, Mexico, Hong Kong Seoul and Sydney.
AMP Capital is a global investment manager headquartered in Sydney, whose majority shareholder is AMP Group (established 1849), one of Australia's largest retail and corporate pension providers. It has a strategic alliance with Mitsubishi UFJ Trust and Banking Corporation, which is also a shareholder, and has a number of joint venture companies in Asia.
AMP Capital is ranked among the top ten infrastructure managers globally, and one of the largest real estate managers in Asia where it is also among the top six for private equity (as well managing as other investment forms). In NZ it owns Bayfair Shopping Centre, Botany Town Centre, Manukau Supa Centa and The Palms shopping centre Christchurch (Wikipedia).
In 2016 AMP Capital acquired the Kalgoorlie-based Eastern Goldfields Regional Prison Redevelopment Project from Lend Lease and MLC. This is a public private partnership with the State government of Western Australia. Australia has nine PPP prisons, which have come under criticism for lack of transparency. The US Federal government is ending its private operation of its prisons, as not providing the required level of services or safety, nor providing savings (RNZ, 26/10/16).
Back to TopUS Spare Parts Giant GPC Plans Automated Distribution Centre In Wiri
GPC Asia Pacific Ltd (US 83.8%, UK 4.8%, various overseas 11.4%) has consent to acquire 5.8100 ha. at 20 Puaki Drive, Wiri, Auckland, from Calder Stewart Development Ltd (NZ 100%) for $33,988,500. The OIO states that GPC Asia Pacific is incorporated in New Zealand and a member of the Australasian GPC Asia Pacific Group, the largest automotive after-market parts supplier in Australia and New Zealand. GPC Group resells and distributes automotive replacement parts, accessories and related tools and equipment.
GPC Asia Pacific intends to build a distribution site on the land, consisting of a fulfilment centre and a standard warehouse, which may include office facilities, a product showroom and a trading branch. It plans to introduce of 'goods-to-person' technology that will automate its storage and retrieval system, and is expected to increase efficiency. It currently employs over 1,000 people in NZ, operating over 115 retail and trade branches under multiple brands, including 85 Repco stores, which are supported by five warehouses.
The Companies Register lists the ultimate owner of GPC Asia Pacific Ltd and GPC Asia Pacific (NZ) Holdings Ltd as Genuine Parts Company, Atlanta, USA. See consents of November 2011 for Genuine Parts' acquisition of Repco; see March 2007 and September 2001 for overseas ownership of Repco. Founded in 1928, the Genuine Parts Company provides "just in time" distribution through more than 3,100 operations with over 50,000 employees in the US, Canada, Mexico, the Caribbean, Australia, New Zealand, China and Southeast Asia, and expanded into Europe with its 2017 acquisition of Alliance Automotive Group.
It also owns the NAPA Auto Parts brand. It also has an industrial parts group under the name Motion Industries, headquartered in Atlanta, Georgia, a business products group under the name SP Richards, an electrical/electronic materials group under the name EIS, all of which operate globally (Wikipedia).
Back to TopChina Forestry To Buy Pinehills Forest, Hunterville
The OIO has granted consent for China Forestry Group NZ Co Ltd (China PR 100%) to acquire 222.8604 ha at 6111 Turakina Valley Road, Hunterville, from Pinehills Forest Ltd (NZ 80.5%; Australia 5.5%, UK 5%, US 2%, China 2%, Crete 2%, Netherlands 1%, Taiwan 1%, France 0.5%, Thailand 0.5%). The price paid was $500,000.
The OIO states that China Forestry Group applied for consent under the special test for forestry activities in s. 16A(4) of the Act. The land is already a commercial forest with 204.6 ha. planted in pinus radiata (established 1997). The remaining land contains 8.5 ha. of indigenous vegetation, 0.7 ha. of other exotic trees and 9.0604 ha. is unplantable ridges, gullies, steep land and boundary setbacks.
China Forestry Group intends to reduce the stocked area of land by approximately two ha. for the required harvest infrastructure. It intends to harvest the existing crop of trees and replant. China Forestry Group was listed as NZ's 19th largest landowner (17,018 ha. October 2019). It is ultimately owned by the Chinese government's State Forestry Administration (RNZ, 17/10/19). See March 2013 for its purchase of 13,000 ha from the NZ Superannuation Fund; also, December 2015.
Back to TopWoolworths To Develop Countdown Supermarket In Lincoln
General Distributors Ltd (Australian Public 99.4%, various 0.6%) has consent to acquire 1.2 ha of residential land at 575 Birchs Road, Lincoln, from Lincoln Developments Ltd (NZ 100%). Price withheld under s.9(2)(b)(ii) of the Official Information Act. The OIO states that General Distributors is the property owning and leasing vehicle for Woolworths NZ Ltd, one of NZ's largest supermarket operators.
The consent permits the Applicant to acquire the land, including the flexibility to grant itself a leasehold interest in the land. The consent is granted in accordance with the non-residential use test in Schedule 2(13) of the Act. General Distributors will develop the land as a new Countdown supermarket, approximately 160 carparks and a café in the ordinary course of its business. It intends to complete development by July 2025 and will not use or hold the land for any residential purposes
On 7/2/19 Stuff reported that Progressive Enterprises supermarkets (now named Woolworths NZ) was planning a subdivision on this site with 272 new homes, a supermarket, shopping area, parks, pre-school, eateries and a covered swimming pool. In Australia supermarkets are involved in housing development but Stuff thought the Council was likely to send the resource consent application on to the Environment Court for decision.The project appears to have been cut back.
This OIO application will have pre-dated the OIO giving Woolworths a ten-consent rubber stamp, see December 2019. See also consents of April 2017 and search CAFCA's Website for "Progressive Enterprises" for earlier consents. See commentary of October 2005 for Woolworths' acquisition of Progressive Enterprises' chain of 150 supermarkets from Foodland (Australia). Progressive Enterprises (i.e. Woolworths) was the winner of the Roger Award For The Worst Transnational Corporation Operating In Aotearoa/New Zealand in 2006.
Back to TopChinese To Build Apartments In Rothesay Bay, Auckland
Since20181 Development Ltd (China PR 100%) has consent to acquire 0.1012 ha at 24 Beechwood Road, Rothesay Bay, Auckland, and 0.1012 ha at 22 Beechwood Road, Rothesay Bay, Auckland, from Mark Sheridan Spencer, Rebecca Anne Spencer and Fiona Margaret Cottam (as independent trustee) as trustees of The Spencer No 1 Family Trust (NZ 100%) for $4.2 million. Since20181 Development Ltd also has consent to acquire 0.0759 ha. land at 20 Browns Bay Road, Rothesay Bay, Auckland, from Darren Paul Porteous (NZ 100%) for $1,680,000.
The OIO states that Since20181 plans to construct an apartment development on these blocks of land. The development will be for at least 175 new residential apartments, with at least 80 new residential apartments on the Beechwood Rd land and approximately three commercial units. Since20181 plans to retain three ground floor units which it intends to lease as shops to service residents.
It will begin construction immediately after obtaining all required consents, and must complete construction of the development by December 2025. It will not occupy any of the residential apartments and must sell all interests in these by the end of December 2026. There are three Since2018 companies, 1, 2 and 3, all classified as "residential property operation and development (excluding site construction)"" and registered at the residential address of one of two directors.
Back to TopInner Mongolia To Acquire Highview Stud, Hamilton
Inner Mongolia Rider Horse Industry (NZ) Ltd (China Public 36.3%, Lin Lang, China PR 32.7%, Hong Kong Public 10.6%, Jiangsu Yuedataihe Venture Fund, China PR 7.7%, Hangzhou CDF Fujin Venture Fund, China PR 6.6%, various overseas 4.6%, US Public 1.5%) has consent to acquire a 35% interest in Bauhinia Farm Ltd which owns 119.425 ha of non-urban land at 1,544 Kakaramea Road, Temple View, Hamilton, and a leasehold interest over the same land for up to 12 years. The vendor is CHG Investments Ltd , (Brent Stephen Gillovic, NZ 34%, The Valan Cohen Foundation, NZ 29.3%, Michael Raymond Hibbert, Australia 25%, Nigel Harrison, NZ 5.8%, Brian Robert Everett, NZ 5.8%, Donald Hamish McIlraith, NZ 0.2%, various NZ (0.001%). The price is $5,443,284.
The OIO states that Inner Mongolia Rider Horse Industry is a majority Chinese-owned horse breeding, exporting and racing business operating in New Zealand and China, part of the Rider Horse Group. It has been operating in New Zealand since 2012. It is acquiring Highview Stud, a 119-ha horse stud at Temple View, Hamilton, which it intends to use to breed, keep and train horses in New Zealand, and to expand its business. It plans to upgrade the stud's facilities, which is expected to create new full-time jobs, exports, increase efficiency and productivity, and bring additional investment into New Zealand. It is expected to advance significant Government policy regarding the NZ thoroughbred racing industry, particularly horse sales in New Zealand.
Manchurian entrepreneur Lin Lang registered Inner Mongolia Rider Horse Industry NZ in May 2014, and by December 2017 had bought and exported 1,484 horses to China, making it our third largest market for horses (Forbes, 12/12/18). Tapping into NZ's horse racing reputation and Chinese interest in the sport, the company was a finalist in the $1-$5m category of the 2017 Export Awards (Stuff, 26.5/17).
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