September 1997 decisions

Telecom buys out Ericsson’s cellphone operation

Telecom New Zealand, a subsidiary of Telecom Corporation of New Zealand Ltd, has approval to acquire the cellphone business of Ericsson Cellular Ltd of Sweden. Ericsson was the principle competitor to Telecom selling airtime on Telecom’s cellular network.

Telecom still has competition from the alternative cellular network run by Bell South, although in February 1997, BellSouth lodged proceedings against Telecom under the Commerce Act, citing anticompetitiveness and misuse of confidential information. It said Telecom was bundling discounted services over which it had a monopoly in return for exclusive relationships, preventing businesses from considering other service options. BellSouth also alleged Telecom was also misusing information provided to allow connection of BellSouth’s landline calls (Press, 1/2/97, "BellSouth takes Telecom to court", p.32).

The majority shareholders of Telecom Corporation of New Zealand Ltd are Ameritech Holdings and Bell Atlantic Holdings Ltd of the U.S.A. Ericsson Cellular Ltd is owned by Telefonaktiebolaget LM Ericsson of Sweden.

Dow Chemical buys leased Taranaki Regional Council land, part Maori Reserve

DowElanco (NZ) Ltd, a subsidiary of Dow Chemical Company of the U.S.A., has approval to acquire approximately 16 hectares of land in Paritutu Road, New Plymouth, Taranaki from the Taranaki Regional Council for $1,700,000. Part of the land is in Maori Reserve 6 Omata District. It is presumably the land on which Dow’s agricultural chemical factory is sited:

"… DowElanco has conducted business in New Zealand for the last 53 years and is a leader in the agricultural chemical market. … the land the subject of this application, is currently leased (with rights of renewal in perpetuity) from the Taranaki Regional Council by DowElanco, for the purpose of chemical manufacturing, formulation and waste destruction. It is stated DowElanco has occupied the site for approximately 38 years."

Iplex of Australia and Netherlands takes over James Hardie Pipelines

In a decision originally almost completely suppressed and released only on appeal in February 1998, Iplex Pipelines Ltd which is owned 75% by Crane Group Ltd of Australia, and 25% by Wavin BV of the Netherlands, has approval to acquire the business and assets of James Hardie Pipelines Ltd for $31,069,154. Wavin is owned 50% by Shell, and by the Overissel Water Authority, a "regional body". James Hardie Pipelines is a subsidiary of James Hardie Industries Ltd of Australia.

Crane already owns the Mico Wakefield Group, a "leading" distributor of metals, fasteners, plumbing supplies and pipeline systems. "Wavin BV is the leading manufacturer and supplier of plastic pipes and fittings within Europe." The takeover is part of the acquisition by Wavin and Crane of James Hardie Pipelines businesses in Australia, Aotearoa, Singapore and Malaysia.

At 6/3/97, James Hardie was 27.9% owned by Brierley Investments Ltd, which in its report to shareholders of that date emphasised James Hardie’s fibre cement and wallboard business and foreshadowed this sale, saying:

"The company has recently divested its non-core irrigation and building services businesses at excellent prices, thereby strengthening its balance sheet and sharpening the focus on its core international fibre cement business where it is the world leader and on its USA gypsum wallboard business."

Mancon of Malaysia lends $6.6 million for Viaduct Basin development

Mancon Berhad of Malaysia has approval to take 51% of Quercus Investments Ltd which has a perpetual lease over just over two hectares of land in the Viaduct Basin in the central business district of Auckland. Quercus is owned by Heng Holdings S.E.A. (Pte) Ltd of Singapore. The consideration for the acquisition is $51 plus shareholder loans of "approximately $6.6 million".

"In March of this year Heng Holdings was granted consent to acquire a perpetual lease over the land, on which to undertake a multi purpose development including tourism, leisure and entertainment, commercial and residential facets. At that time Heng Holdings advised it intended sourcing the necessary support from the Asian market to meet the capital needs of the Viaduct Basin project, estimated at approximately $300 million and to provide further expertise towards the development. It is stated Heng Holdings approached Mancon and presented the concepts of the project. Mancon expressed an immediate willingness to invest in the project and as a consequence a mutual agreement was reached by both parties. … It is stated Heng Holdings has been actively trying to secure the necessary resources, both financial and non financial, in order to complete a project of such magnitude and significance to New Zealand."

For further details see our commentary on the March decisions.

Amtrust (formerly Gulf Resources) buys Price Waterhouse Centre, Auckland

In a decision originally almost completely suppressed and released only in February 1998 on appeal, Amtrust Pacific Ltd, which is owned by Michael and George Karfunkel of the U.S.A., has approval to acquire the Price Waterhouse Centre on the corner of Hobson, Wyndham and Federal Streets, Auckland, for $82,750,000 from Aoyama Development (NZ) Ltd of Japan. The Centre is on 0.3577 hectares of land.

Amtrust was formerly known as Gulf Resources Pacific Ltd and City Realties Ltd, which were highly controversial companies due to their flight from environmental responsibilities in the U.S.A., and their business practices in Aotearoa (see for example our commentaries on the October 1991 and January 1996 OIC decisions).

Now, "Amtrust intend to embark on an expansion programme with the intent to grow the company’s current asset base to between NZ$500 million to NZ$600 million over the next year".

Chelsea Sugar Refinery buys nine hectares leased from Ports of Auckland

New Zealand Sugar Company Ltd, a subsidiary of Colonial Sugar Refinery of Australia, has approval to acquire nine hectares of land on the Waitemata Harbour foreshore belonging to Ports of Auckland Ltd, for $975,000. The land, in Birkenhead, is part of the Chelsea Sugar Refinery, and New Zealand Sugar has leased it since 1927. It also owns approximately 80% of the property surrounding the land.

Dynasty Pacific of Singapore floats its hotels

Dynasty Pacifc Group has set up the Pacific Hotel Trust, which it owns 25%, to own The Heritage Queenstown, The Heritage Christchurch, Citylife Wellington, Citylife Auckland, and The Heritage Auckland. It includes 0.7663 hectares on Fernhill Road, Queenstown, Otago, where the Heritage Queenstown is situated. The other 75% will be owned by other persons "who may be overseas persons". The Trust is paying $85,000,000 for the properties.

Dynasty Pacific is owned 36.5% by the Tang Family of Singapore, 41.0% by the Tan Family of Singapore, 10.0% by Mr Pang of Singapore, and 2.5% by the Horsburgh Family of Aotearoa. These associates have been involved in a number of property and accommodation schemes, including the Pacific Group Ltd, The Habitat Group, Firle Holdings Ltd, and New Zealand Land Ltd. The Tang family controls the Singaporean hotel operator, Dynasty Hotels International. Closely associated is the Symphony Group Ltd which is controlled by Colin Reynolds and family. It developed a number of apartment projects in Auckland and took over the Greenstone Lodge suite and apartment complex development in Queenstown. The same parties were involved in the hotel/apartment "Heritage" development of the old Government Building and Carucca House in Cathedral Square, Christchurch. See for example our commentary on the November 1996 OIC decisions.

Dana Commercial Credit (U.S.A.) acquires rights to ‘Novotel’ name in Aotearoa

Renovo Eleven Inc, a subsidiary of Dana Commercial Credit Corporation of the U.S.A., has approval to acquire "sub-franchise rights and royalties in relation to the use of the ‘Novotel’ trade name in New Zealand" from AAPC (Cyprus) Ltd, a subsidiary of the Accor Group of France. The price is "the payment of royalty payments which may exceed $10 million". AAPC (Cyprus) holds the Novotel hotel master franchise in some countries in the Asia Pacific region, including Aotearoa. AAPC (Cyprus) propose granting a sub-franchise to Renovo to use the Novotel name in Aotearoa, subject to existing sub-franchises already granted to AAPC NZ Pty Ltd and AAPC Properties Pty Ltd, both of which will pay royalties to Renovo.

Accor Asia/Pacific Corporation (AAPC) owns the Novotel Hotel in Wellington, Novotel Auckland and Holiday Inn Queenstown. It is the largest hotel company in the Asia/Pacific region with 135 hotels and 25,000 rooms in 15 countries (TravelAsia Online, "Accor to take second bite at SPHC", by Ian Jarrett, 25/7/97, See for example our commentary on the October 1997 OIC decisions.

This decision was originally almost completely suppressed, and released only in February 1998 on appeal.

Sellotape restructures: sells consumer division to senior management

Springtime SA, incorporated in Luxembourg, has approval to acquire Sellotape New Zealand Ltd from Sellotape Products (NZ) Ltd, a subsidiary of Sellotape International BV of the Netherlands. The parent company has separated its business into industrial and consumer divisions, selling the latter (which includes Sellotape New Zealand) to former senior management. The shareholding in Springtime is held by "The Sellotape Holding Sarl, the ultimate beneficiary of which is Franck Ullmann Hamon (85%), and Rory Cullinan (15%)".

Venezuelan buys further land in Whakatane, despite July refusal

Alberto Finol of Caracas, Venezuela, has approval to acquire just under four hectares of land on Western Drain Road, Whakatane, Bay of Plenty for "approximately $114,480". The purchase has an interesting background.

In December 1996, we reported that

In a deal apparently brokered by the New Zealand Dairy Board to smooth trade with Venezuela, Mr Alberto Finol of Caracas, Venezuela has approval to buy 109 hectares of land near Whakatane, Bay of Plenty for $2.3 million. "Mr Finol is involved in a joint venture business with the New Zealand Dairy Board which imports substantial quantities of dairy produce from New Zealand to Venezuela and the United States. The New Zealand Dairy Board is anxious to expand the existing business arrangement and views the acquisition as assisting in achieving that goal. It is stated that the proposal is a result of recommendation by the New Zealand Dairy Board that he expand his involvement and association with the New Zealand dairy industry."

The land in the current decision forms a corner of that property (a dairy farm) and will be farmed in conjunction with it. Finol is described as "the controlling owner of a substantial number of entities involved in the dairy business and trade".

However in July 1997, the OIC refused to allow Finol to buy further land in the Bay of Plenty for dairy farming. This is a review of that decision. It is not made clear why this application was approved while the previous one was refused.

Hamurana Gardens, Rotorua, acquires further land

Hamurana Gardens Ltd, owned by Dr Ming-Liang Huang of Taiwan, has approval to acquire 19 hectares of land on Turner Road, Hamurana, Rotorua, for $415,000.

"Hamurana was initially granted consent to acquire 43 hectares of freehold land and 36 hectares of lease land, (being the Hamurana Springs Public Recreation Reserve) situated on the northern side of Lake Rotorua, on which to establish a tourist complex, nine hole golf course and associated tourist facilities in October 1995. Hamurana wish to acquire the property to provide a better access to and development scope for the tourist complex currently being developed on the adjoining land. In addition, it is stated the continual enhancement of the reserve which is leased by Hamurana and administered by the Department of Conservation is for the benefit of all New Zealanders…"

The original land was acquired for a peppercorn: we reported in October 1995 that

"… Hamurana Gardens Ltd was 24% owned by Dr Huang Ming-Liang; he has consent to acquire the remaining 76% for $76. ‘The applicant states that it is proposed that the property will be developed into a tourist complex which will include a hotel, residential cottages, a golf course and other associated tourist facilities …’"

The OIC does not mention that in July 1996, as we reported,

"Further land adjacent to a reserve is being sold, this time four hectares in Te Waerenga Rd, Hamurana, Rotorua, Bay of Plenty, for $260,500. It is being sold to Hamurana Gardens Ltd of Taiwan for ‘proposed development of a tourism complex and upgrading and enhancement of the reserve’. The reserve is managed by the Department of Conservation."

NZ Petroleum buys 8,712 hectares of forests in Taranaki, Gisborne/Hawkes Bay

New Zealand Petroleum Company Ltd, which is owned 29.905% by Triton Energy Corporation of Dallas, Texas, U.S.A., and 29.45% by "various other overseas shareholders", has approval to acquire three substantial areas of "natural" forest from Timber Holdings Ltd. Timber Holdings will receive 10 million shares (or 34.2%) of the ordinary shares of New Zealand Petroleum in partial payment, reducing Triton’s percentage to 19.7%. The price for the three areas of land is given as "between $7,700,000 and $8,300,000" although it is not clear if that includes the shares.

The three forest areas are:

  • the 6,037 hectare Mangatanawhia Forest near Wairoa, Gisborne/Hawkes Bay;
  • the 793 hectare Paparangi South Forest near Waverley, Taranaki; and
  • a Forest Right over the "approximately" 1,882 hectare Paparangi North Forest near Waverley, Taranaki.

"It is stated it is NZP’s ultimate intention to maximise its market share in the natural forest industry by efficiently managing the properties and by acquiring additional properties in the future. NZP state the proposed transaction will provide an infrastructure which will benefit both existing managers of natural forest estates and importantly, encourage management of currently non productive forest estates under the Forest Amendment Act 1993 which in turn will contribute to the overall efficient application of New Zealand’s natural resources."

Rayonier acquires forestry cutting rights to 850 ha. of land on Kawhia Harbour

Rayonier New Zealand Ltd, a subsidiary of Rayonier Inc. of the U.S.A., gained approval to acquire forestry cutting rights to 850 hectares of land near Kawhia, Waikato, adjoining the foreshore of Kawhia Harbour. The price paid was originally suppressed but was released on appeal in February 1998: $13,250,000. The rights are being acquired from The Crown and Tainui Kawhia Incorporation who have a lease agreement for the land.

"… Rayonier wish to acquire the forestry rights for the purpose of protecting its rights to the timber on the land, which it has agreed to purchase and cut. … Tainui Kawhia has been seeking a partner to assist it to acquire 100 percent interest in the trees on the land, and the proposed acquisition will allow Tainui Kawhia the ability to achieve this objective."

Part of Woodbine Station near Queenstown changes hands

Mrs Siau Lin Chong of Singapore, who has been granted permanent residency status, has approval to acquire approximately 861 hectares of Woodbine Station at Kinlock, Glenorchy, Queenstown, Otago, on the south bank of Lake Wakatipu and the Dart River. It adjoins the Kinloch Recreational Reserve and the Routeburn Scenic Reserve and comprises 397 hectares of freehold land and 464 hectares currently Pastoral Lease but "to be freeholded following a tenure review". The price is $1.7 million and the vendors are A.G. and L.P. Bowes of the U.K.

"It is stated the applicant … intends to develop Woodbine Station to its optimum potential, by improving the pastoral qualities of the property and undertaking a comprehensive fencing programme on the property with the ultimate intention of converting the property to a viable deer farming unit. It is also proposed to establish a farm park type tourism venture on the property."

However this is not entirely consistent with the station’s previous sale. In February 1992 we reported that the Bowes’ company, Merion Systems Ltd, was buying the 2,501 hectare Woodbine Station for $1.3 million plus stock and plant. It appears they are now breaking it up – at a substantial profit.

Purchase of Canterbury farm land by Taiwan company refused

The OIC has refused approval for Fairnet International Ltd to acquire land for crop farming in Canterbury. The area of the land and the proposed price have been suppressed. Fairnet is owned 95% by a national of Taiwan, and the remainder by nationals of Australia and Aotearoa.

Land for forestry

  • Juken Nissho Ltd of Japan has approval to acquire a lease over 320 hectares of Crown land in Spirits Bay Road, Parengarenga, Far North District, Northland, for $20,000 per year from the Department of Conservation.

"The proposal represents the reassignment of an existing lease agreement between JNL and DOC (on behalf of the Crown), for a further period of 35 years, which will enable JNL to continue its existing afforestation programme on the property. The Commission is advised that Juken Nissho’s Kaitaia Mill, currently employs approximately 235 people in the production of raw products. … the continued afforestation on the property will provide an additional 45 employment opportunities in the planting, pruning, thinning and logging work required to be carried out as part of the programme."

  • Carter Holt Harvey Ltd, approximately 51% owned by International Paper Products of the U.S.A., has approval to vary the lease it holds over 15 hectares of land off Ngapipito Road between Kaikohe and Kawakawa, Northland, leased from the Ngatihine Trust. The annual rental is "approximately $561 per annum".

"In October 1981 CHH entered into a lease agreement with the Ngatihine Trust, for a term of 33 years, to acquire certain lands for the purpose of afforestation over an area of approximately 5,062 hectares. The Commission is advised that following negotiations, the parties have agreed to a varying of the existing lease agreement. The variation will result in road areas within the property and a former boundary of convenience being included within the lease."

Other rural land sales

  • Half of Donjay (NZ) Ltd, the "main supplier of ducklings to duck rearers within New Zealand" is being sold to an Australian syndicate for $1,240,250. The deal, which will enable the owners to "expand the current operation from a cottage industry into significant entity within the duck breeding industry", includes eight hectares of land at 346 Orepunga Road, RD2, Cambridge, Waikato. The current owners, W. M. and K. M. O’Donnell will still own half of the company. The Australian side is a complex arrangement of three trusts:
    • Bonenzio Pty Ltd, trustee for the Bonaccordo NZ Land Trust, whose beneficiary is Giuseppe Bonaccordo of Australia;
    • Forsenzio Pty Ltd, trustee for the Forsenzio Holdings Trust, whose beneficiary is Mark Keith Forster of Australia; and
    • Ilenzio Pty Ltd, trustee for the Ilenzio Holdings Trust, whose beneficiary is Lloyd Richard Ilett of Australia.
  • Corbans Wine Ltd, a subsidiary of DB Group Ltd, which is "approximately 58.39%" owned by Asia Pacific Breweries Ltd of Singapore, which in turn is owned 80% by Heineken NV of the Netherlands and Fraser Neave Ltd of Singapore, has approval to acquire 56 hectares of land in State Highway 50, Hastings, Hawkes Bay for $800,000. A vineyard will be developed on the land.
  • A company, Waitaki Village Ltd, has approval to acquire 14.271 hectares of land on Lake Waitaki, Canterbury for a residential subdivision and tourist venture. The company is owned 75% by Terence John Bradbury, a New Zealand citizen resident in Australia, and 25% by Colin Bryan Lofts of Australia. The land is being purchased from Halray Developments Ltd for $600,000.

"The initial development project encompasses the subdivision of approximately 2.672 hectares into 14 residential lots. The second involves the retention of approximately 9.019 hectares for future development as a fishing lodge or a similar recreational venture to enhance the proximity of the land to Lake Waitaki. It is proposed that the remaining 2.58 hectares of land which is situated on the eastern side of State Highway 83 and adjoins Lake Waitaki, is to continue to be utilised as a public reserve."