October 1996
decisions
INL
gets approval to buy all of Sky Network
In a remarkable decision originally
almost completely suppressed and released only in April
1997 after appeal to the OIC, Independent Newspapers
Ltd (INL) which is owned 49.53% by News Ltd
of Australia, or News Ltd itself (or an associated
company) are given approval to buy 100% of Sky Network
Television Ltd for an amount that was still
suppressed in April 1997 and not released until February
1998: $223,226,841 for 15.84%. What is remarkable
is that INL is recorded by the OIC as owning 32.16% of
Sky. The approval is to take over the remaining 67.84%.
Though it has been publicly reported that INL was close
to agreement to buy up to 80% of Sky, this is the first
suggestion that it had actually purchased some. The
figure 32.16% implies that shareholders Tappenden
Construction (headed by Alan Gibbs and Trevor Farmer
7.51%), Todd Communications (subsidiary of the Todd
Corporation, 8.8%), Craig Heatley and Terry Jarvis
(15.85% between them) had sold out. In fact it was
reported in March 1997 that INL had given up and the deal
was off (Press, 1/3/97, "INL scraps bid to
own Sky; investors left pondering", p.25). See our
commentary on the OIC’s June 1996 decisions.
Rand Merchant Bank of South Africa
wants to deal in electricity
In an approval which indicates,
firstly, the likelihood of speculation in the newly
established New Zealand Electricity Market, and secondly,
the flimsiness of the already vestigial requirements of
foreign investors, RMB Australia Ltd, a subsidiary
of Rand Merchant Bank Ltd of South Africa,
has approval to "acquire property (electricity) in
New Zealand and commence business". It expects that
the amount payable will exceed $10,000,000. One of
the criteria for non-land investments is that the
applicant should demonstrate "financial commitment
to the proposal". The OIC has accepted in fulfilment
of this criterion an
"undertaking to lodge
collateral in the form of bank guarantees or
letters of credit with the Clearing Manager of
the New Zealand Electricity Market to comply with
the prudential requirements of said Market. The
existence of a Deed of Guarantee providing for
the obligations of the applicant to be guaranteed
by Rand Merchant Bank Ltd is further evidence of
the applicant’s financial commitment to the
project."
In this, Rand Merchant Bank is getting
off considerably more lightly than the actual energy
supply companies who provide services to consumers.
According to the New Zealand Herald (17/6/96,
"Power companies asked for deposit", by James
Gardiner),
"Electricity supply
companies face paying cash bonds totalling more
than $100 million before they can take part in
the new wholesale market. The companies also risk
being put in receivership or having their
electricity cut off if they default on their
bills. Some of the former power boards have taken
exception to the proposed market rules and are
trying to get receivership provisions rewritten.
But the Electricity Corporation and Contact
Energy are believed to be insisting on the
prudential and default provisions. …
"Companies buying through
the market will have to put up cash security
equivalent to the value of their peak demand plus
a margin. This will range from $300,000 for the
smallest buyers to $30 million for the largest.
Those amounts will have to be topped up if power
prices rise dramatically at any time.
"If the power companies do
not want to pay cash, they will need a bank-grade
credit rating (A minus or better), which most are
unlikely to get, or a letter of credit from a
bank. However they do it, the companies will face
higher costs, which, if not offset by greater
efficiencies in the market, will be passed on to
the consumers."
These rules would obviously put a bank
like Rank at a significant advantage to the supply
companies in bidding for wholesale electricity. Some may
in fact be forced to use the bank’s services rather
than trade directly, adding to the costs of electricity.
RMB Australia, listed as Australian
Gilt Securities (RMB Australia was formerly AGS, which
was taken over in 1988 by RMB), is the only member of the
"Trader Class" amongst the "Market
Participants" in the New Zealand Electricity Market
(NZEM) as at 1 October 1996. "Market
Participants" are defined as "companies who
have applied to become Members of NZEM". The others
comprise the "Generator, Purchaser and Trader
Class" (Contact Energy, ECNZ, Mercury Energy, Otago
Power Limited, and Pacific Energy), the "Purchaser
and Trader Class" (Central Electric, Counties Power,
Electro Power, Energy Brokers, MainPower New Zealand,
NorthPower, PowerBuy Group, Southpower Energy Purchases,
Tasman Energy, and Trans Alta), the "Generator and
Trader Class" (Stratford Power), and the
"Purchaser Class" (BHP New Zealand Steel Ltd,
King Country Energy, and TrustPower) (ref: Electricity
Marketing Company Ltd’s Web site http://www.emco.co.nz/nzem/index.htm).
Clearly the merchant bank sees this
trading and hedging on the electricity market as a source
of profit. RMB Australia appears to specialise in
derivatives and similar financial risk instruments and
includes amongst its "services"
"RMBA is pioneering the
application of risk management techniques in the
deregulated electricity industry with a
particular focus on energy risk management, the
development of structured product and hedging. In
New Zealand, RMBA provides full electricity
trading outsourcing services in partnership with
Energy Group Limited." (From http://www.rmb.co.za/ags.html on Rand Merchant Bank Holdings
Ltd’s Web pages.)
The parent company, Rank Merchant Bank,
in South Africa, performs similar functions in regard to
mining products: "Trading and hedging, by using
innovative techniques, of all kinds of commodities –
from precious metals to units of electricity – in
all appropriate international markets." (http://www.rmb.co.za/resources/areas.html)
Rand Merchant Bank is a subsidiary of
RMB Holdings, through its life insurance company,
Momentum Life Assurers Ltd. The main activity of the
holding company is life assurance, although it also has
subsidiaries in asset management, health insurance and
short term insurance. Its subsidiaries include Rand
Merchant Bank, RMB Asset Management, Momentum Health, RMB
Properties and RMB Securities Trading. It jointly holds
short-term insurer Aegis with NBS Holdings (MBendi
Information Services, http://mbendi.co.za/ca94.htm).
The bank has taken a close and public
interest in the privatisations being promised by the
South African government, and
"Towards the end of 1995
RMB secured a contract for the bank to advise on
the sale of Mossgas [the apartheid-era gas-to-oil
conversion plant, considered to be a white (!)
elephant]. Recent developments for the bank
include the financing of the first stage of a
$925 million hydroelectric dam at Sonda Gorge in
the Congo, with $15 million being contributed by
the bank. The balance will come from the
Congolese governments and European
institutions." (MBendi Information Services,
http://mbendi.co.za/corm.htm.)
Publicly, it has taken much care to
appear "socially responsible". As its
"Social Responsibility" Web page boasts
"We don't just give – we enable: Rand Merchant
Bank's approach to social upliftment goes beyond mere
corporate donations and involves the application of its
banking expertise to pressing development problems"
and describes examples.
However things aren’t quite that
simple. The Financial Mail of South Africa reports
("Umgeni water: Exposure or cover-up?",
19/1/96, http://www.atd.co.za/fm/issues/190196/LA.2.html):
"The outcome of the
fund-raising of the Umgeni Water Board, a
public-sector storage and reticulation utility
which has been the subject of a ministerial
inquiry, is that the shareholders of Rand
Merchant Bank have been enriched to an
unquantifiable extent at the expense of consumers
and taxpayers…
"The investigation by
auditor Fisher Hoffman Sithole poses questions in
a number of vital areas.
"The first is how Rand
Merchant Bank is able to initiate a borrowing
programme through a public-sector entity which
results in trade totalling R86bn on which losses
of R162m are sustained and is then able to avoid
disclosing its profits to the investigators.
"You can bet your bottom
dollar that bank MD Paul Harris knows precisely
how much the bank made. This is because of the
bank’s ‘marking to market’
procedures – an arcane phrase which means
the bank’s positions are marked against
prevailing prices at the daily close of business.
"Moreover, the bank is
audited twice a year by two accounting firms. The
results – to the last cent – must be
open for inspection.
"RMB employs clever
executives, some of whom are given incentives
based on the bank’s profits. They, too, are
going to know to the last cent how well the bank
has done.
"Fisher Hoffman says that,
because of complex cross-hedging with other
stocks carrying different default risk profiles,
it cannot quantify the extent of RMB’s
profits on its Umgeni transactions. The only
reason it cannot do so is that the bank
won’t tell.
"Over two vital years of
trading – the years in which Umgeni
sustained the bulk of its losses – RMB was
Umgeni’s sole market maker. Of course, it is
possible that Umgeni’s loss of R162m –
a large part of it avoidable – did not
accrue to RMB as a profit but, in the absence of
a convincing alternative explanation, reaching a
different conclusion stretches credulity."
So not only is it questionable whether
financial commitment is being made in this investment,
but questions over the character of the controlling
shareholders have been raised.
CS
First Boston takes over Feltex Carpets
Fairbanks Investments Ltd which
is owned 96% by a nominee for CS First Boston
(Europe), AG, and 4% by Messrs Davis and
Steedman, both residents of Aotearoa, has
approval to acquire the business assets of Feltex
Carpets Ltd. CS First Boston (Europe) is approximately
65% owned by CS Holding of Switzerland
(i.e. the major bank, Crédit Suisse). The purchase
includes the following land:
- six hectares of leasehold
land in Duncan St, Foxton, Manawatu;
- seven hectares of leasehold
land in Miller St, Dannevirke, Hawkes Bay;
- five hectares of leasehold
land "more or less situated in or adjoining
the bed of the Rangitikei River", Sandon
(presumably Sanson), Manawatu; and
- 35 hectares of freehold
land in Halcombe Road, Kakariki, Manawatu.
The whole decision was originally
completely suppressed. It was released in August 1997,
but with the price still suppressed.
Feltex was owned until 1996 by BTR
Nylex, of the U.K., which bought it as part of Feltrax
International from the corpse of Equiticorp in 1989. It
apparently decided to sell Feltex Carpets in March 1996.
Feltex is the third largest manufacturer in Aotearoa and
25th largest exporter (exporting two-thirds of its
output), employing 1,200 people. It also has a carpet
factory in Christchurch. The Mr Davis mentioned above as
a shareholder is Chris Davis, general manager of Feltex
Carpets. (Press, 22/6/96, "Feltex Carpets for
sale", p.27; 11/12/96, "Management may buy
Feltex", p.28; 12/12/96, "Feltex confirms
sale", p.32).
In January 1997, the Commerce
Commission gave Alliance Textiles clearance to buy Feltex
Yarns. This included yarn plants at Wainuiomata and
Kakariki, which it closed down with the loss of 100 jobs.
The purchase made Alliance the biggest yarn producer in
Aotearoa (Press, 22/1/97, "Feltex deal
approved", p.29).
Heinz-Wattie of U.S.A. buys Shortland
Cannery
In a decision
originally almost fully suppressed and released only
after appeal to the OIC, in April 1997, Heinz-Wattie
Ltd, which is a subsidiary of H J Heinz Company of
Pittsburg, Pennsylvania, of the U.S.A., has
approval to acquire meat processor Shortland Cannery
Ltd (formerly named Waytemore Investments Ltd)
for a still suppressed amount. "It is stated that
Heinz-Wattie view the combining of Shortland’s
canning operation with Heinz-Wattie’s canning
operation as bringing greater efficiencies which in turn
will benefit its New Zealand customers." According
to NZPA (Press, "Heinz-Wattie buys
cannery", 9/11/96, p.28) Shortland belonged to the
family interests of former Carter Holt Harvey owner, Sir
Richard Carter. Heinz-Wattie said it "marked the
entry of a major branded food company into the
country’s meat industry". However just two
months later Heinz-Wattie announced it was moving the
Shortland meat processing plant from Auckland to
Australia. It said that "after three months of
looking at transfer options, Southern Country Foods in
Wagga Wagga, New South Wales, was confirmed as the lowest
cost business". Most of Shortland’s 47 staff
would lose their jobs. It would however invest $2 million
at its Tomoana site in Hastings (Press,
"Heinz-Wattie move meat plant to Aust",
11/1/97, p.22).
At the same
time, Heinz-Wattie subsidiary Tip Top Ice Cream was
rejected by the Commerce Commission in a takeover bid for
New American Ice Cream owned by the Diary Group, saying
it would give Tip Top a dominant position in the
take-home ice cream market, although not in frozen
novelties, scoop ice cream and frozen desserts. Following
this, Heinz-Wattie put Tip Top and another subsidiary,
Tegel Foods, on the market. Tip Top holds about 80% of
the national ice cream market and Tegel about 70% of
chicken sales. It also announced that J Wattie Foods,
Wattie Frozen Foods and BestFriend Petfoods would merge
into Heinz-Wattie Ltd. (New Zealand Herald,
"Tip Top, Tegel go up for sale", 14/11/96; Press,
"Tip Top trims bid for New American", 25/10/96,
p.19.)
Coca-Cola
Amatil to buy PET bottle manufacturing from Carter Holt
Coca-Cola Amatil (NZ) Ltd, in a
decision originally almost wholly suppressed and released
only in April 1997 on appeal to the OIC, has approval to
"acquire property being specific assets in relation
to the manufacture of PET bottles and PET preforms
currently undertaken by Carter Holt Harvey Ltd".
The price is still suppressed. Coca-Cola Amatil (NZ) Ltd
is a "member of the Coca-Cola Amatil Ltd group of
companies" of Australia. This sale does not
appear to have previously been made public. The property
is in Auckland and Christchurch.
Shriro of Hong Kong takes fuller
control of Transmark Corporation
Shriro Pacific Ltd of Hong
Kong now has a 92.55% interest in electronics
distributor Transmark Corporation. It is doing
this through Gandava Investments Ltd which is
acquiring 100% of Transmark. Gandava is 92.55% owned by
Shriro and 7.45% by Ocin Holdings Ltd of Aotearoa.
The price was $25,119,829, based on a price of $1.60
per share. The OIC states: "Shriro Pacific was
previously granted consent to acquire up to 100% of
Transmark." This approval was in June 1993, when
Shriro was registered in the Cayman Islands. Its
shareholding in Transmark has risen steadily since it
first gained approval to take a 50% shareholding in
August 1991. "Shriro have now advised that the
acquisition is to be undertaken by Gandava and this will
result in New Zealand parties retaining an interest in
Transmark." Gandava secured 92.3% of Transmark in
November and declared the offer unconditional, having
increased its price to $1.95 a share (equivalent to a
total of $30,614,792) in October.
The increase in price and extension of
its acceptance deadline came after cries of
"unfair" by minority shareholders and a
challenge by an independent director. One of the
company’s top 20 shareholders, James Cornell, called
it "insulting", and largest minority
shareholder, Toronto Unit Trusts, also indicated its
unhappiness. A valuation by Ernst and Young indicated a
fair price of $2.00 to $2.15.
Gandava owned 74.07% of Transmark
before the buyout, with 7.55% of Gandava being owned by
Transmark managing director, Nico Wamsteker (Press,
16/9/96, "Transmark bid ‘insulting’",
p.38; 27/9/96, "Report values Transmark
higher", p.16; 26/10/96, "Transmark bid
raised", p.28; 22/11/96, "Transmark
unconditional", p.29). Shriro is owned by Mark
Shriro who lives in Monaco. Transmark’s chairman,
David Wilson, lives in Hong Kong. In March 1996,
Transmark sold its 1995 acquisition, U-Bix Business
Machines Ltd, to Blue Star.
Harvey Norman Group prepares to set up
shop
Harvey Norman Holdings Ltd, an
Australian public listed company, and any wholly
subsidiary of the Harvey Norman "Group",
are given approval to commence business in Aotearoa. The
amount they propose spending is "in excess of
$10,000,000".
Press reports indicate aggressive plans
by the Australian retailer, which stocks "furniture
to whiteware", including computers. It hopes to open
16 to 20 stores in Aotearoa during the next five years,
two stores opening in Auckland in the second quarter of
1997, and a third later that year. Ten per cent of the
floor space would be devoted to computers. The company
has 56 stores in Australia. (Press, 18/9/96,
"Harvey Norman plans 16 to 20 stores in NZ
chain", p.32.)
One U.S. company to another: Borden
packaging sells to AEP
Borden Inc of the U.S.A.
is selling its subsidiary, Borden (NZ) Ltd to AEP
Industries Inc of the U.S.A. for US$21,576,000
(about $30,823,000). The operation
manufactures flexible packaging and AEP "which has
business experience relevant to the Borden’s
business activities, intends to develop and expand that
business".
According to press reports, the name
will be changed to AEP Industries (NZ), and the operation
had previously been part of AHI, UEB, Whitcoulls and
Printpac (Press, 14/11/96, "Packaging name
change", p.36). Indeed, the OIC last heard from
Borden in March 1990, when we reported that
Borden Inc (U.S.) is taking
over Printpac-UEB’s flexible packaging
operation. The application says this is "in
recognition of the need for the flexible
packaging business to become part of a global
international packaging operation. It is felt
that only through such an international and
global operation would the business be capable of
keeping abreast with the rapid technological
development in the industry. Borden sees the
acquisition of the flexible packaging group from
Printpac-UEB as an opportunity to expand its
packaging operations throughout
Australasia."
In fact the situation is somewhat less
benign than either news or OIC reports suggest. AEP
Industries Inc has taken over Borden Inc’s entire
"Global Packaging" business. On 11/10/96 AEP
announced that:
"it has completed the
acquisition of Borden, Inc.’s Global
Packaging business. The acquisition more than
triples AEP’s annual sales and establishes
AEP as a world-class industry competitor with
leading market share positions in several key
product segments in the U.S. and Europe, a
broader geographic presence and a wider range of
product offerings."
The takeover also included a new AEP
board made up of four directors from Borden, five from
AEP board, and one jointly chosen ("AEP Industries
Inc. completes acquisition of Borden global
packaging", press release by AEP, 11/10/96, http://www.aepind.com/newsletters/oct-11-1996.html).
The Italian magazine, Italia
Imballaggio ("The Voice of Italian
Packaging"!), went as far as saying that the
takeover "created the largest supplier of plastic
packaging pallet stretch films in the world and one of
the largest plastic packaging manufacturers for the food
industry at European level" (http://www.webcity.it/italiaimballaggio/news_e.html).
The takeover was followed rapidly by
job losses:
"AEP Industries Inc.
announced today that it has ceased manufacturing
operations at a plant in North Andover, Mass.,
that had been part of the Global Packaging
division of Borden, Inc. AEP acquired
Borden’s Global Packaging business on
October 11, 1996. The North Andover plant
manufactured pallet wrap and polyvinyl chloride
(PVC) film products.
"Approximately 320
employee positions will be phased out over the
next four months as a result of the North Andover
plant closing. … Additionally, AEP plans to
eliminate approximately 40 administrative and
sales positions, most of which are based in North
Andover. The Company stated that it does not
anticipate any further significant plant
consolidations in North America." ("AEP
Industries Inc. closing facility acquired from
Borden Global Packaging", press release by
AEP, 24/10/96, http://www.aepind.com/newsletters/oct-24-1996.html.)
AEP paid a total of approximately
US$360 million (about NZ$514 million) for the Borden
packaging business, US$280 million ($400 million) in
cash, and "at least" US$80 million ($114
million) worth of newly issued AEP shares, giving Borden
approximately 34% of AEP.
On 13/9/96, AEP had announced falling
sales and net income for the previous year, due largely
to borrowing for the Borden takeover ("AEP
Industries Inc. announces record third quarter earnings
per share", press release by AEP, 13/9/96, http://www.aepind.com/newsletters/sep-13-1996.html).
The two companies were described in the
takeover announcement as follows:
"Headquartered in South
Hackensack, New Jersey, and employing about 1,100
people, AEP Industries manufactures, markets and
distributes nationally an extensive range of
polyethylene film products for stretch pallet
wrap, industrial packaging, agricultural and
can/box liner applications. It achieved record
sales and net income of US$242.9 million and
US$13.5 million, respectively, in its fiscal year
ended October 31, 1995, double its annual sales
just five years earlier in 1990 and 3 ½ times
that year’s net income.
"AEP markets its specialty
and standard polyethylene film products to the
packaging, beverage, food, pharmaceuticals,
agricultural and textile industries. It operates
five highly efficient manufacturing plants in the
United States. A now complete capacity expansion
and manufacturing efficiency program included new
facilities started up in Wright Township, PA, in
early 1996 and Alsip, IL, in mid 1995. Other
facilities are located at Waxahachie, TX,
Matthews, NC, and Chino, CA.
"Borden Global Packaging
had calendar 1995 sales of approximately US$625
million, primarily flexible film for stretch wrap
and other packaging uses, and rigid plastic
packaging. Nearly US$250 million of the total is
in North America, slightly over US$300 million in
Europe and US$75 million in the Asia/Pacific
region.
"The Borden packaging
business employs about 3,500 people and operates
27 plants in 12 countries. Its film products are
made from polyvinyl chloride, polypropylene and
polyethylene resins and marketed under several
brand names including Resinite, Sealwrap,
Loadmaster, Proponite and OPPtimum. Not included
in the sale are Borden packaging businesses in
South America, which continue to be integrated
within the Borden Chemical, Inc. operating unit.
"Borden, Inc., with sales
of approximately US$5.9 billion in 1995, is a
diversified producer of dairy, pasta, snacks and
other packaged grocery products; consumer
adhesives and dairy, pasta, snacks and other
packaged grocery products; consumer adhesives and
wallcoverings; and adhesives, resins and plastic
products for packaging and industrial uses.
Headquartered in Columbus, OH, and privately
owned since March 1995 by partnerships affiliated
with the investment firm Kohlberg Kravis Roberts
& Co. (KKR), Borden employs about 27,500
people and operates 180 plants worldwide."
("AEP Industries/Borden packaging
combination announced", press release by
AEP, 20/6/96, http://www.aepind.com/newsletters/jun-20-1996.html.)
AEP is not above looking for government
assistance when it is available. On 12/7/95 it applied
for "Transitional Adjustment Assistance" (TAA)
under NAFTA. This assistance is available if (note the
euphemism) "workers separated from employment after
December 8, 1993 (date of enactment of Pub. L. 103-182)
are eligible to apply for NAFTA-TAA under Subchapter D of
the Trade Act because of increased imports from or the
shift in production to Mexico or Canada" (ref: http://www.ici.coled.umn.edu/register/labor/10-16-95lab/lab9.html). One such application was turned down (http://www.ici.coled.umn.edu/register/labor/9-4-95lab/LAB19.html), but another approved for Worker Adjustment
Assistance for "worker separations" in South
Hackensack, NJ and Moonachie, NJ on 12/6/94 (http://www.ici.coled.umn.edu/register/labor/9-25-95lab/lab2.html).
P&O has lease on Otahuhu land
belonging to James Kirkpatrick Ltd
NZL Industrial Park Ltd (NZLIP),
which is owned by Peninsula and Oriental Steam
Navigation Company of the U.K., has approval
to acquire a lease of up to six years over ten
hectares of land in Manu Street, Otahuhu, Auckland,
owned by James Kirkpatrick Ltd. It already has a
lease over this land and a further three adjoining
hectares, and this is a "rearrangement" of its
interest. It will pay $100,000 a year for the
lease of the land, on which it runs its business, and
will redevelop an unused part of it.
Bridgestone Japan (Firestone) takes
100% of Bridgestone Tyres (NZ) Ltd
Bridgestone Corporation of Japan
(BSJ), which is the parent company of Bridgestone/Firestone
Inc. of the United States of America, which in turn
owns approximately 80% of the capital of Firestone
NZ Limited, has approval to acquire 100% of
the shares in Bridgestone Tyres (NZ) Ltd (BSNZ)
for an orginally suppressed amount. On appeal to the OIC,
it revealed in April 1997 that the amount was $19.5
million.
"BSNZ for many years has
been the independent and exclusive distributor in
New Zealand of Bridgestone tyres. These are
imported from various members of the BSJ Group
throughout the world. The current distribution
agreement between BSJ and BSNZ is due to
terminate in December of this year."
Walter Bau-AG of Germany readies for
Britomart construction
A company hoping to construct the
controversial Britomart Transport Centre in Auckland
has approval to commence its construction and civil
engineering business. Walter Bau-AG of Germany,
which owns 75% of Concrete Constructions Group
Ltd of Australia, is setting up Walter-Concrete
Constructions (Britomart) Ltd, of which it will own 30%
and its Australian subsidiary will own 70%. The
company "has entered into a contract for the
construction of an underground carpark, bus and rail
interchange facility in central Auckland, to be known as
"The Britomart Transport Centre". Aucklanders
may be surprised at this, because the Auckland City
Council was not due to make a decision on the project
until November. Their proposal was for the project to be
developed by NatWest Markets Australia, a subsidiary of
the National Westminster Bank. The Council says:
"Council established basic
principles in December 1995. After reviewing
competitive submissions from developers it signed
a Heads of Agreement with NatWest Markets
Australia in May this year. NatWest Markets in
turn has put together finance packages and
obtained a fixed price construction contract
conditional upon the Council signing the final
contract … NatWest Markets, is employing the
contractor, and taking the major financial,
construction and development risks." (Ref:
Auckland City Council Web server, http://www.akcity.govt.nz/CityScene/199611/041196/britomart/consider.htm)
It describes the development process as
follows:
"Step One
"Auckland City Council
sells the Britomart site to NatWest for a fixed
price of $56 million.
"Step Two
"NatWest Markets hires
construction companies Walter Bau ag and Concrete
Construction of Australia [sic] to build the
first stage of the development on a fixed price
basis. This includes excavating the site and
building the transport centre to the
Council’s specification together with
underground carparking and other services for the
above ground sites owned by the developer. The
builders will also underground a section of Quay
Street adjoining the Britomart, and carry out
essential work under Customs Street for the
Council at the same time.
"The builders strengthen
and secure the ten historic buildings being
preserved and run services - water, electricity
and sewerage - to each of the new building sites
created on the roof of the transport centre, at
ground level. These sites will be landscaped
until development starts.
"Step Three
"Council buys the finished
transport centre for a fixed price from the
developer on completion, and also pays a fixed
price for the Quay Street undergrounding, the
work under Customs Street, the public open spaces
and some Heritage protection. This will happen in
1999, or when the works are complete and not
before. The Council makes no progress payments
during construction.
"Step Four
"Meanwhile the developer
has been busy offering the new ground level sites
for sale to developers internationally.
Development of any of the sites can commence as
soon as work begins on site.
"It is intended that all
of the above ground development will be completed
within 10 years.
"The developer is able to
offer any unsold sites back to the Council in 10
years time, but on terms so [sic] advantageous to
the Council." (Ref: http://www.akcity.govt.nz/CityScene/199611/041196/britomart/borrow.htm.)
The many critics of the scheme, which
include a cross-section of the Auckland population, point
to the encouragement it gives to use of the private car
over public transport in an already congested city
centre, destruction of historic sites, the cost of the
development (reminiscent of the Birch/Muldoon Think Big
projects), the secrecy and lack of genuine consultation,
and the crassness of yet more mirror-glass in the area.
Waihi gold mining companies buy three
more blocks of land in Waihi
As in February and March, more land is
being acquired for the Waihi Gold Mine in and
around Waihi. The purchase of three blocks of residential
land has been approved from five private individuals: 0.0940
hectares (no address given) for $230,000; 0.3667
hectares (no address given) for $130,000; and 0.0625
hectares at 11 Haszard St for $60,000.
The purchases are all by Waihi Gold Company Nominees
Ltd of Australia, which "holds rural and
urban land in and around Waihi as trustee for the
participants in the Waihi Gold Mining joint
venture." It is owned 28.35% each by Waihi
Mines Ltd and Welcome Gold Mines Ltd, 27.84%
by AUAG Resources Ltd, and 15.46% by Martha
Mining Ltd. All of these companies are Australian
owned except AUAG Resources, which is owned in Aotearoa.
"The property is being
acquired to enable the extension of the existing
mining operation. … The proposed extension
of the mine will extend the life of the mine for
an additional seven years (approximately) and
this will result in continued employment for the
165 people employed in the operation. The
applicant states that the extended operation will
entail the further investment of significant
development capital."
Housing development of 200 dwellings
at Gulf Harbour, Whangaparaoa
In May 1996 we reported on new
developments with the Gulf Harbour Marina. Gulf
Harbour is at Whangaparaoa on the Hibiscus
Coast. This month, Hibiscus Hills Ltd, owned by Investors
Realty Group Properties Pte Ltd (IRG) which is
incorporated in Singapore but has owners from
Singapore and Malaysia, has approval to buy ten
hectares of land from Gulf Harbour Ltd for $10,000,000.
Gulf Harbour Ltd is 95% owned by "Messrs
Goh, Sim and Tay of Singapore". These are
presumably the Goh Cheng Liang (55%), Sim
Lai Hee and Tay Kwang Thiam (20% each)
named in May.
"IRG is an experienced
developer of integrated residential housing
estates overseas … the land is surrounded by
holes 2-9 of the international class Robert Trent
II designed golf course at Gulf Harbour. It is
the applicant’s [IRG’s] intention to
develop and sell a high quality housing estate
(approximately 200 lots), which will incorporate
community club facilities with a business centre
and recreational areas."
Land for forestry
- Deborah Miller of
Brookfields, Auckland is hard at work again. This
month she has organised
- The sale of another block
of land in Paponga Road, Broadwood,
Far North District, Northland to Jadebrook
Developments Ltd, owned by four Taiwan
residents. It is of 40 hectares for
$201,000. It is being sold by the
by now familiar Far North
Afforestation (NZ) Ltd. The last such
sale was in June 1996.
- The sale of three
further blocks of the Mahuri Forest,
Mangamahu, Wanganui to residents of Taiwan,
all of whom have been granted permanent
residency in Aotearoa. The blocks are 21
hectares for $86,018, 27
hectares for $105,554.50, and 22
hectares for $85,885. In each
case the land is being sold by the New
Zealand Forestry Group Ltd which, in
the first two cases, will develop the
land for forestry. In the third, the
purchasers, the Lu Family Partnership,
have "employed a New Zealand based
manager to establish and run the forest
on their behalf" but the
manager’s identity is not stated.
Miller’s last such sale was in July
1996.
- The sale of 86 hectares
of arable land at Galatea, Bay of
Plenty. See "other rural land
sales" below.
- Blakely Pacific Ltd, as
trustee for the South Blakely Trust of the
U.S.A., has consent to acquire 45
hectares of land "known as the Waterfall
property" in Crawford Road, Tauranga,
Bay of Plenty, for a suppressed amount.
The amount was made public in April 1997 after
appeal to the OIC: $285,000. Blakely
Pacific "have previously been granted
consent to acquire in excess of 6,594 hectares
of land for forestry operations". See
the September 1996 decisions for the last such
one. The 6,594 hectares does not include that
one: they claimed they only had 6,594 then, and
acquired an additional 1,849 hectares (in Otago)
by that decision.
- Carter Holt Harvey Ltd,
owned "approximately 51%" by International
Papers of the U.S.A., has approval to
buy 24 hectares of land at Managhopai (sic),
Hawkes Bay, for $12,500 for forestry.
Other rural land sales
- North Star Racing Ltd,
which is owned 50% by a Swedish
national residing in Singapore, and 50% by a
New Zealander, has approval to buy eight
hectares of land in Tamure Place, Ruakaka,
Whangarei, Northland for $155,000 from
the Whangarei District Council for
development as a racehorse breeding, training and
grazing operation.
- A resident of Malaysia who
has "the ultimate intention of residing on
the property and personally managing the farming
operation" has approval to buy 144
hectares of arable land at Clevedon,
Waikato for $3,425,000. A lease over
the land will continue until it expires in June
1997. "In the longer term the applicant
proposes to establish a forestry operation on the
less productive and steeper areas of the
property. It is further proposed to undertake
beef production including experimentation and
development of breeds of cattle (particularly
Limousin cattle) for beef export purposes."
No evidence is given that the applicant has such
expertise.
- The Tainui Maori Trust Board’s
subsidiary, Tainui Development Ltd, is
selling four hectares of land in Sylvesters
Road, Hamilton, to CDL Land New Zealand
Ltd for a suppressed amount, for residential
subdivision. The amount was revealed in April
1997, after appeal to the OIC, to be $500,000.
CDL Land is a wholly owned subsidiary of CDL
Investments New Zealand Ltd, which is 57.36%
owned by CDL Hotels New Zealand Ltd, which
in turn is 69% owned by CDL Hotels
International Ltd, which itself is 51%
controlled by the Hong Leong Group of Singapore.
- As noted above, Deborah Miller of
Brookfields, Auckland, has organised the sale of 86
hectares of arable land at Galatea, Bay of
Plenty to Agnes Developments Ltd,
owned by a resident of Taiwan and his
family "who have made application for
permanent residency and intend residing
permanently in New Zealand", for $960,000.
"They propose converting the property which
it is claimed is an uneconomic beef and wool
operation to a dairy farming unit." They
propose engaging a New Zealand expert to carry
this out.
- A resident of Taiwan who,
"together with his supporting family, will
all take up New Zealand permanent residency by
mid 1997" has approval to acquire 127
hectares of land in Sunnex Road, Rotorua,
Bay of Plenty for $2,800,000. The land
is currently used as a "riding
establishment" and has been "partially
developed as a farm stay destination". The
new owner proposes to "develop the operation
as a destination for overseas tourists using
connections that they have both in Taiwan and
Mainland China." They propose spending
"in excess of a further $500,000 to
enhance the accommodation and catering facilities
on the property in a bid to entice overseas
tourists."
- In a decision largely suppressed,
a party "predominantly owned" in
Aotearoa, has approval to buy 150 hectares
of land from the Ben Ohau Station Ltd,
adjacent to and surrounding the Pukaki Airport,
three km north of Twizel, Otago for an
amount "yet to be determined". Why an
application to the OIC was required is not
explained, and even some details of the
"benefits" of the investment have been
suppressed.
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