June 1998 decisions
The majority privatisation of Auckland International Airport Ltd, owner of Auckland
International Airport, Mangere, Auckland, is approved in two separate decisions. The
airport, the largest and busiest in Aotearoa (78% of international visitors arrive or
depart from it according to the Press, 2/7/98, "Investors check in for
Auckland airport float", p.26), includes "approximately 1,501 hectares"
of land which adjoins the foreshore and contains two buildings listed on the Historic
The airport was owned as follows:
The Crown - 51.6%
Auckland City Council - 25.8%
Manakau City Council - 9.6%
North Shore City Council - 7.1%
Waitakeri City Council - 3.7%
Franklin District Council - 1.2%
Infratil Investments Limited - 1%
The approvals relate to the sale of the Crowns majority 51.6% share.
The two decisions are firstly, for undefined "persons who may be overseas
persons" to acquire "25% or more" of the company (despite the
governments stated intention to keep overseas ownership below 25%); and secondly for
the international investment banks organising the sale to acquire the entire 51.6%. The
latter is presumably for technical reasons. The banks are Merrill Lynch and Company
Inc. (U.S.A.), Credit Suisse First Boston Corporation (Switzerland),
and ABN Amro (Netherlands). The price in both cases is "to be
advised", but the market value was estimated to be "in the vicinity of $500
million". The government actually realised $390 million (Press, 28/7/98,
"Airport shares power up for take-off", p.26).
The government also squeezed the company before sale, which distributed $135 million to
its shareholders from retained earnings and increased debt, threatening its debt rating
with Standard and Poors, but adding $70 million to the governments sale
proceeds (Press, 25/5/98, "Auckland Airport payout threatens credit
The sale ran immediately before that of Wellington Airport, which was the trigger for
the collapse of the Coalition Government. It attracted only slightly less controversy. For
the first time in the central governments privatisation program of the last fourteen
years, it was carried out by a public offering of shares rather than by tender. The
process was "one of the largest offerings of shares ever conducted in respect of a
New Zealand company" involving a toll-free 0800 number and widespread distribution of
the investment statement (abbreviated prospectus) through NZ Post shops. It was intended
to "result in achieving a maximum participation by New Zealand investors". In
other words it was an exercise in emulating Margaret Thatcher in trying to create
"popular capitalism" and maintain 75% local ownership. It will probably fail on
both counts. Most of the New Zealand investors, who received only tiny packets of shares,
will sell them very quickly as has happened in local government privatisation share
allocations, particularly as a heavy capital investment program is expected for the
airport in the next decade. The shares will like 60% of the sharemarket end
in overseas hands.
The share allocation did succeed in attracting first-time investors, in numbers
described by one stock broker as "amazing". The government guaranteed a share
allocation to all New Zealanders applying. The minimum they could apply for was $1,000
worth of shares (Press, 2/7/98, "Investors check in for Auckland airport
float", p.26). The ANZ Bank announced loans for people wanting to buy, attracting
criticism from politicians and academics (Press, 8/7/98, "Loan for shares
attacked", p.1). In the end 68,000 New Zealanders bought shares, with 48,000 new to
the sharemarket according to the government. Of these, 55,000 were issued from a public
pool of shares. All received the minimum (and uneconomic) $1,000 parcel (556 shares).
Indicating the type of investors attracted, 30% had asked for only $1,000 and another 30%
for $2,000 worth. Another 12,400 privileged investors received shares through a $10
million broker pool. They averaged $8,000 shares per person. All transactions were
provisional until the international share offer had completed.
Individual investors ended up with just a quarter of the shares they applied for, and
22.1% of the company. Institutional investors within Aotearoa received 18% of the shares
they asked for and got 9.9% of the company. Overseas investors took about 40% of the
shares offered, giving them an initial 20.6% of the airport company, though it was clear
from the huge oversubscription within Aotearoa that no sales overseas were needed to sell
all the shares on offer. (Press, 28/7/98, "Airport shares power up for
take-off", p.26; 29/7/98, "Airport in cruise mode with 13.9% first-day
The first problems occurred over the mass advertising campaign for the float. Even ACT
leader Richard Prebble, displaying the hypocrisy he has made a trademark of his career,
feigned unhappiness that the advertisements implied that only New Zealanders could apply.
(The advertisements featured former All Black captain Sean Fitzpatrick.) In fact a
separate float to overseas institutions was taking place. In a statement only a politician
could understand, Prebble protested: "That statement is more than false. Its
untrue." He took his complaint to the Advertising Standards Authority (advertising
pros may also understand such logic) (Press, 7/7/98, "Airport advert claim
untrue", p.7). He also took complaints to the Registrar of Companies and
to the Securities Commission and called for its abolition when it refused to act
(ACT Press release 20/7/98). However, National Business Review, usually unfailing
ACT loyalists, rapped him over the knuckles for his unashamed populism.
Alliance leader Jim Anderton complained to the Commerce Commission for similar reasons,
with the same results (Press, 21/7/98, "Airmail may be too late to catch
However there was some truth in Prebbles and Andertons claims that the
advertising was misleading. While it was advertised as a share issue for all New
Zealanders, in fact it was their share allocations that were scaled back rather
than reduce the allocation to foreign investors. Prebble also pointed out in his letter to
the Registrar of Companies (5/7/98) that "the deal has been structured so that
Merrill Lynch have an incentive to offer shares to foreigners rather than New Zealanders.
On page 102 of the prospectus it is stated that Merrill Lynch will receive 2.5% commission
on foreign sales and 0.5% commission for sales to the New Zealand public." Share
brokers added weight, saying "at least half of the shares will end up in
institutional and overseas investors hands", not to Kiwi small shareholders as
the government claimed (Press, 3/7/98, "Brokers dismiss PMs airport
holdings claim", p.33). In fact more than half did.
Investment analyst Brian Gaynor criticised the deal for expecting investors to put up
their money without knowing the value that would be put on the shares (Press,
1/7/98, "Airport issue pool topped up for public", p.30). Sharebrokers were
unhappy about the lack of shares allocated to them, and domestic institutions furious
about the scaling back of their shares (for example New Zealand Herald, 28/7/98,
"Allocation of airport shares angers AMP", by Geoff Senescall).
Chris Lee (Press investment columnist) called the float a farce.
"The fact is that only the favoured clients of a few major brokers were allocated
sensible parcels of shares. Merrill Lynch, small here and new, decided which brokers
should get sensible allocations based on some criteria invented by the Government or ML.
Others to get sensible allocations were overseas investors, who are unloading most of the
50 million shares they scored, making a fat profit at the expense of the New Zealand
institutions. Clever eh!
"The Auckland International Airport float used a method that has made a bundle for
Merrill Lynch, a bundle for the international investors (who scored 22% of the shares),
and it made a few bob for Sean Fitzpatrick and the other beneficiaries of the
record-breaking advertising and printing bill that sucked in so many first-time investors.
It has made next to nothing for small punters, and because the airport was eventually sold
at a discount to market value, the sale has made too little for the vendors us, the
taxpayers." (Press, 10/8/98, "Lessons from Auckland Airport share
Lees last comment reflects the fact that the share price rose 13.9% (from the 180
cents issue price to 205 cents) on the first day of trading. Those profits were almost
certainly made by overseas and institutional investors: individual investors had not by
then received the reference numbers required to organise sales.
Lees comments are among the few that focus on the lack of integrity and the
conflict of interest in this and previous privatisations. A further issue is that Merrill
Lynch both advised the government on the sale (it recommended privatisation, to
no-ones surprise) and then profited from organising the privatisation process.
The reasons the government gave to the OIC for the privatisation were the need for
increased investment in the airport, risks in the increased property development required,
using the proceeds to reduce government debt, and a statement that "investments in
airports such as Auckland International, are best made by the private sector".
Leaving aside the opportunity to reduce debt, the other reasons would seem to argue
strongly against the float.
The need for increased investment, if a big issue, also makes it an unsuitable
investment for most small investors as the returns are likely to be low. The government
cant have it both ways. But the government has exaggerated this, saying an
"estimated $1 billion in capital works [are] required at the airport over the next 20
years". But the prospectus lists up to $100 million in the next two to three years on
runway repairs; around $100 million on a new domestic terminal in the medium term; and
about $300 million over ten years for a second runway. The company expected to fund that
out of cash flows (Press, 11/7/98, "Heavy airport costs no bar to
investment", p.21). The $1 billion over 20 years (if true) is very likely manageable
from the companys own resources.
If it is true that there are "risks" in the "greater focus on property
development", then they were not properly explained to the investors. In fact, the
statement is exaggerated or untrue: given the companys monopoly position, the
investment risks are extraordinarily low. The more likely outcome is a risk to the region
(and given the airports importance, the country) from the privatised company using
its position to increase charges.
A company owned by myriad small investors and by institutions will be run by its
managers (who could equally well be employed by a publicly owned enterprise), so it is
hardly credible that it will be best managed in this way rather than subject to some
representative control. The statement that "investments in airports such as Auckland
International, are best made by the private sector" has scant evidence. Auckland will
be the only listed airport in the southern hemisphere, and among only five listed airports
in the world: British Airports Authority, Rome, Vienna, and Copenhagen (Press,
1/7/98, "Airport issue pool topped up for public", p.30; 3/7/98, "Brokers
dismiss PMs airport holdings claim", p.33). There are considerably more
privatised airports around the world but there is minimal long term experience of
In the end, the logic of the sale escaped most people except the investment banks,
sharebrokers and institutions making their margins on the sale. As Paul Little, editor of
the Listener put it:
"If we cant own and run something as basic as an airport, perhaps we should
just stop pretending to be a country, close the place down and all go and live somewhere
that takes itself seriously and has enough respect for its inhabitants to inform them when
theyre being done over." (8/8/98, "Flights of fancy", p.7.)
After all, Auckland airports had been run by government and local governments very
successfully for sixty years.
rationalisation" of animal health industry: buys Youngs
|In an exceptionally public spirited act, the giant pharmaceutical and
chemical transnational, Novartis AG of Switzerland (through its subsidiary Novartis
Animal Health Inc.) has acquired Youngs Animal Health (NZ) Ltd. The price was
originally suppressed, but was partially released on appeal in October 1998: this
acquisition was part of a transaction by which Novartis also acquired Youngs
Animal Health Australia Ltd, for a combined price of "approximately A$28,056,000"
for the two companies.
The price clearly was unimportant anyway: Novartis bought Youngs
for a higher purpose, namely to "enable the New Zealand animal health industry to be
rationalised, which is currently characterised by a number of relatively small companies
with limited product ranges" (excuse their syntax). Quite incidentally it will
increase profitability: "the proposal will provide the opportunity for economies of
scale which would be expected to result in associated benefits of cost savings and an
enhanced service to the companys New Zealand customers". We need not worry too
much anyway: Novartis bought Youngs from another transnational, Crampian
Pharmaceuticals Ltd of the U.K. We should presumably watch out for more such
high-minded acquisitions until no further "rationalisation" is possible, and
prices are fully under their control.
We documented the merger of Ciba-Geigy Ltd and Sandoz Ltd, both of
Switzerland, into Novartis, in August 1996. It was then said to be the "largest
merger ever", but that record has since been broken a number of times. The new
company was to have a market value in excess of US$60 billion, making it the
second-largest pharmaceuticals company in the world, with a market share of 4.4%, sales of
14 billion Swiss francs, and in its own words, "number one worldwide position in life
Sterling Grace of the
U.S.A. takes over Claymore Asset Management
Sterling Grace L.D.C., owned by members of the Grace family of New
York, U.S.A., has approval to acquire a further 25.6% of Claymore Asset
Management Ltd, a "New Zealand resident company" in which it already had a
24.2% shareholding, for $720,000. Claymore owns Stableford Investments Ltd,
which in turn owns Spicers Portfolio Management Ltd.
"Spicers is a funds management company offering tailored investment options to its
customers in New Zealand. It is stated the proposal provides Claymore with development
capital and continuity of ownership necessary to ensure that the company has the financial
resources required to compete in an every increasing competitive marketplace. It is also
stated that Claymore will continue to be operated and controlled from within New Zealand
at all times following the proposed acquisition."
Claymore Asset Management Ltd is a rather strange company according to its New Zealand
Companies Office record. It has only one share, held jointly by two of the directors,
Craig Dawon and George Kerr. The directors include James Livingstone Reeves of New York.
So it is not clear how the current 24.2% is held by Sterling Grace.
We can find little on Sterling Grace, other than that Forbes reported in 1997:
"Khaled Sobhy, vice president of Middle East operations at Sterling Grace Capital
Management, recently invested more than $5 million in Egyptian stocks on behalf of
brothers John Grace and Oliver Grace Jr., after two years of research. What made them
jump? The privatisation last May of a big Cairo real estate development company.
Word in Cairo was the government would sell 10% of its holding to the public and 10% to
employees, but in the end 75% was privatised. That showed the government is finally
serious about ceasing to be an obstruction, says Sobhy." (http://www.forbes.com/forbes/97/0421/5908376a.htm)
A Claymore Group with a subsidiary called Claymore Asset Management Ltd has a Web page
at http://www.claymore.tc. "What does
tc stand for?" I hear you cry (it normally stands for the country of
origin, except in the imperial U.S.A.!). It doesnt stand for "tax cover"
though it might as well. The page states:
"The Claymore Group is a diversified financial services group offering a range of
financial, investment, insurance and management services to overseas and domestic
businesses and individuals.
The Group offers high return on investment opportunities within the zero tax domicile
of the Turks and Caicos Islands and a full range of international investment opportunities
and services in major markets.
Each Group company operates autonomously but at Group management level we are able to
ensure cooperation between the member companies and to provide overlap where one event or
transaction can benefit from expertise in another member company."
We dont know if the Turks and Caicos Islands group is connected with the New
Symantec takes over
Binary Research for $52 million
Software manufacturing giant, Symantec Corporation (or Symantec Ltd), has
approval to acquire the assets of Binary Research Ltd and its subsidiary Binary
Research International, Inc. for $52,370,977. According to the OIC,
"Symantec is a world leader in utility software for business and personal
computing and is the seventh largest software company in the world. It is advised Symantec
currently has a very small sales office in New Zealand and the proposed acquisition of the
business assets of Binary Research Limited will significantly increase Symantecs
presence in New Zealand. Furthermore, it is stated the New Zealand Office of Binary
Research Limited will become a software development office for Symantec and most of the
existing employees of Binary Research Limited will be retained. Additionally it is stated
the proposal provides for the introduction of further capital for development purposes and
will significantly increase the sales of Binary Research Limiteds software products
as part of the Symantec product line."
Binary Research had created a product called Ghost, which considerably simplifies the
management of networked computers which are the basis of most large organisations
computing. Ghost allows a standard image of a computers hard disk to be made and
then "cloned" to other computers over the network. The management of such
computers is highly labour intensive without software such as this. Symantec estimated the
market for disk cloning software had grown from $US1 million to $US16 million just from
1996 to 1997. According to a Symantec news release, "Ghost is the clear leader in the
disk cloning market with more than 3.5 million seats installed in the last 18 months. The
product is used by more than half of the Fortune 500" and also many university
computer laboratories. It is part of Symantecs strategy "for serving corporate
customers", under which it recently announced an alliance with IBM.
About half the price of buying out Binary Research will be written off as R&D
expenses. Symantec also owns the popular Norton brand of utility software, and Ghost will
be marketed under the Norton name in future. Symantecs other products include ACT!,
Mobile Update, pcANYWHERE, Visual Café for Java, Visual Page, and WinFax. (Press,
29/6/98, "Symantec buys BRL for Ghost", p.28; Symantec news release,
"Symantec Acquires Ghost, Expanding Corporate Solutions Set", 24/6/98, http://www.symantec.com/press/n980624.html;
Sanga takes over
SolNet, exclusive agency for Sun computers
Sanga International Inc. of Canada has approval to acquire SolNet
Technologies Ltd in from the McNae Family Trust for $18,000,000. SolNet
is the exclusive independent sales agent for Sun Micro Systems New Zealand Limited
within Aotearoa. "Sanga believes SolNet has an excellent management team which is
expected to add to the overall value of the business globally as well as within New
The majority shareholder (52.8%) of Sanga is Ventures North International
Inc. which in turn is ultimately owned by the Majere Group of Companies Limited,
which is ultimately owned by the Maine Family Trust, the trustees of which are Shane
Main and Shaun Main, who are both Canadian citizens.
|Rexel of France buys Ideal
In a decision originally almost completely
suppressed but partially released on appeal in October 1998, Rexel SA of France
has approval to acquire Ideal Electrical Suppliers Ltd for a price that is still
suppressed. Rexel is 71.65% owned by Pinault-Printemps-Redoute SA, a French
publicly listed company. "Rexel state the proposal is a continuation of its existing
world-wide network acquisition of Ideal". Ideal is also present in Queensland,
According to Rexels Web site, it also acquired R.E.C. Australia and New Zealand
from The General Electric Company Plc this year. It claims itself "the largest
electrical supplies distributor in the world with operations in 20 countries" and
reports that 64.1% of its consolidated turnover was outside France in the six months to
Heinz-Wattie buys Praise and ETA brands from
In a decision originally almost completely suppressed but partially
released on appeal in October 1998, Heinz-Wattie Ltd, a subsidiary of H. J.
Heinz Company of the U.S.A., has approval to acquire "the salad
dressings business and the spreads business" of Griffins Foods
Ltd for a suppressed price. The purchase includes the production plant and equipment
of the "Praise" trademark and brand, and a licence of the "ETA"
trademark and brand. Griffins is a subsidiary of the Danone conglomerate of France.
Griffins considers that "the salad dressings, peanut butter and variety sauce
segments of its business lie outside Griffins core biscuits and snack food
business" and so wishes to sell them. Heinz-Wattie sees synergies in spreads and
The acquisition was investigated by the Commerce Commission and approved (see decision
327, at http://www.comcom.govt.nz/adjudication/s6667.cfm). According to the
Commissions report, the sale also includes "a contract
for the sole distribution of HP and Lea & Perrins sauces in
New Zealand". Danone manufactures these sauces. Before the acquisition, Heinz-Wattie
"salad dressing manufacturing facilities at Hastings and
Auckland, and also imports salad dressings from Australia. The company supplies a range of
bottled, fresh and bulk salad dressings including mayonnaise, coleslaw dressing, salad
dressing, salad cream, tartare sauce, potato salad dressing, French dressing, Italian
dressing, French vinaigrette and Italian balsamic dressing. The salad dressing brands
owned and used by the company include Heinz, Watties,
Kraft, Weight Watchers and The Good Taste
The ETA and Praise brands include mayonnaise, coleslaw
dressing, salad dressing, potato salad dressing, French dressing, ranch dressing, thousand
island dressing, seafood dressing and tartare sauce.
buys Lakeland Hotel in Queenstown
Noahs Regency Hotel Ltd, owned by Amalgamated Holdings Ltd
of Australia, has approval to acquire the Lakeland Hotel in Queenstown,
Otago, from Lakeland Tropical Resorts Ltd of Singapore. The price was
originally suppressed but released on appeal in October 1998: $25,000,000. Lakeland
Tropical Resorts is owned by Kwon Ping Ho and Te Hwee Liang of Singapore.
"It is stated the applicants parent company, Noahs Hotels (NZ) Limited
has a substantial presence in New Zealand through its operation of hotels in Auckland, New
Plymouth, Rotorua and Christchurch. The applicant wishes to re-establish a business
presence in Queenstown. To achieve this, Noahs have decided to own and operate a
Queenstown hotel of the quality of the Lakeland Hotel which it has previously owned and
which it has managed for the preceding five years."
In October 1993 we reported:
A Singaporean controlled company, Tropical Resorts Ltd, has approval to buy the
Lakeland Hotel in Queenstown for approximately $14,787,916. "The Commission is
advised that the shareholders of Tropical have extensive investments in the tourism and
related industries and view the acquisition as an opportunity to extend their activities
into New Zealand. The applicants state that they will undertake a significant
refurbishment of the hotel which is required to maintain the hotels position in the
strengthening three to four star tourist market of Queenstown. The Commission is further
advised that Tropical will market the hotel and New Zealand in general through its
marketing group in South East Asia. The vendors of the hotel (Noahs Hotels Ltd, which is
part of the Amalgamated Holding Group of Australia) have advised that their cash flows did
not permit them to undertake the much needed refurbishment. The Commission is further
advised that the vendors will be retained to manage the hotel and that they view this as
an ideal situation being able to maintain control of the property by way of a Management
Agreement without the risks associated with a continuation as owner." The owners of
Tropical Resorts are Wah-Chang Group of Singapore (40%), Chang-Fung Company Ltd of Hong
Kong (12%), Natsteel Resorts International Ltd of Singapore (19%), Japan-Asia Investment
Company Ltd of Japan (19%), and Asian Strategic Capital Ltd of Hong Kong (10%).
Six thousand hectare
Poronui Station sold by Carter Holt to U.S. investors
Approval has been given for the sale of the 6,334 hectare Poronui Station, 44
kilometres from Taupo, Waikato, to Poronui Station Ltd which is owned
by Mark Christopher Blake (56%), Wendy Margarete Blake (33%) and Todd Austin
Blake (11%), all residents of San Francisco in the U.S.A. The vendors
were two subsidiaries of Carter Holt Harvey Ltd (itself a subsidiary of International
Paper Products of the U.S.A.), Matapapa Farm Ltd, and Pokirikiri Farm
Ltd. CHH has retained ownership of forests which are on part of the land. The sale
price was originally suppressed but released on appeal on October 1998: $7,000,000.
The station adjoins land held for conservation purposes. It will be used for tourism as
well as forestry.
The station is currently the focus of commercial deer hunting and trout fishing
operations. One company, Helisika, operates "wilderness hunting and fishing
trips" from the station, which was the original liberation site of Sika deer in 1905.
It operates two Hughes 500 turbine helicopters (ref http://taupo.com/hunting/helisika.html).
Fishing at "Poronui Ranch" is advertised on a number of Internet sites overseas.
One Rotorua angler was not happy at the sale or how it was carried out. He wrote on a
fishing and hunting bulletin board:
"I just wonder how other anglers feel about real estate companies who advertise
properties for sale by emphasising things like beautiful trout stream,
your own private river, trout stream, tourist potential, or
great for lodge, river runs through property. I for one am tired of them
promoting the tourism potential of what is a public fishery. The end result is that
tourist operators do buy the property and then capture the public resource by not allowing
anyone to cross their land to the river except their clients. I say boycott them.
I read in the paper that Poronui is to be sold. The real estate company is promoting it
as having wilderness fishing and tourism potential. Anglers have been denied access to
this prime fishing water for too long because of greedy tourism fishing guides. Now the
real estate companies want to try and sell it to more tourist operators. Its about time we
anglers took a stand. I for one will never buy any land from Bayleys Real Estate while
they continue to promote places such as Poronui Station as in such a way as to imply a
private fishery could be had. Join with me and Boycott them." (http://www.fishnhunt.co.nz/bulletin/messages/7.htm)
The OICs lengthy "rationale" for the approval does not allay these
"It is stated the property is currently predominantly used for forestry purposes
(approximately 2,704.4 hectares), with a smaller area (approximately 70.8 hectares) being
utilised for beef and deer farming, together with recreational trout fishing and deer
hunting sports. A further area of some 1,000 hectares is utilised for pastoral grazing.
The remainder of the property is primarily steep hilly terrain, upon which both native
bush and scrub is located. The native bush is to be protected by a registered encumbrance
that will prohibit it clear felling or milling.
Carter Holt Harvey (CHH) has decided to divest its interest in Poronui Station, thus
forming the basis of this application. CHH state there are several reasons prompting the
- Poronui is peripheral to CHHs Tokoroa and Hawkes Bay forest estates;
- Poronui is not a highly productive site owing to its altitude and harsh climate;
- CHH does not view deer farming and tourism as businesses in which it has experience or
- the underlying land value is higher than is justified for forestry at Poronui.
Accordingly, Poronui was offered for sale by a tender process and was widely marketed
to ensure that CHH maximised the sale price. It is stated the proposal will allow CHH to
release capital for further investment elsewhere in its forestry and processing business
in New Zealand while retaining (under a forestry right) the ownership of the pinus radiata
and douglas fir forests contained on part of the land. Additionally it is stated the
proposal will allow the development of the tourism potential of the property, something
that would not otherwise have happened under CHHs current ownership.
Poronui Station advise they will introduce substantial additional capital to develop
the existing fishing hut facility, which consists of three removable buildings, to a world
class sporting lodge. The sporting lodge will be developed to allow for accommodation of
up to 20 guests and will be open seven days a week for a period of eight months of the
year. The lodge will be utilised as a base for guided trout fishing and sika deer hunting.
Additionally it is advised eco-tourism will be developed on the property, including nature
trails, mountain biking, horse trekking and hiking. It is the intention that the lodge
will be opened on the evening of the Millennium, namely 31st December 1999."
refused: in Northland and Canterbury
Two residents of Switzerland have had an application refused to acquire land in Northland
for a homestay and backpackers lodge. Leroy Downs Ltd owned by a citizen of Canada
has had an application to acquire a land for deer farming in Canterbury refused.
Neither was "considered to be in the national interest". Most other details are
suppressed in both cases. (Note: the Canterbury refusal was reversed in November 1998.)
Land for forestry
- New Zealand Plantation Forest Company Ltd owned by Chuetsu Pulp and Paper Co,
Ltd (30%), Hokuetsu Paper Mills Ltd (30%), Marusumi Paper Co. Ltd (30%) and Marubeni
Corporation (10%), all "substantial Japanese companies, involved in
forestry and commerce within Japan", has approval to acquire 233 hectares of
forestry cutting rights in Tinopai, Northland for a suppressed amount. "NZPFCL
intends to acquire a forestry right over approximately 233.3 hectares of the property for
a term of 22 years, for the purpose of establishing a commercial forestry operation on the
- Dr Franklin Daniell and Cassandra Daniell, both citizens and residents of
the U.S.A., have approval to acquire 20 hectares of land at Ashton
Road, Whangateau, Warkworth, Northland, for $1,150,000 for forestry and
lifestyle purposes. "
approximately 40% of the land is currently utilised for
afforestation purposes. The applicants intend to develop a further 25% of the property for
[and] take up permanent residence in New Zealand by 31 August
- Yaquina Kiwi Forest Corporation incorporated in the U.S.A. and owned by Fred
M. Van Eck, of the U.S.A., has approval to acquire "approximately" 167
hectares of land on Mimiha Road, Matata, Bay of Plenty, for $450,000 for
forestry. In April 1996, we reported that "Yaquina Forestry Corporation
approval to buy 319 hectares of land at Otamarakau, in the Bay of Plenty, for $1,200,000
for forestry planting."
- Trustwood Forests (Kiteroa) Ltd is selling an interest in a block of land for
forestry at Ihungia Road, Te Puia Springs, East Cape, Gisborne, this time
"approximately 280 hectares". A one-third share goes to Vetorino
Forestry Group Ltd, owned by Mr Frank Vetorino and Janet Vetorino-Howard,
both residents of the U.S.A. for $325,000. A one quarter share goes to Trees
Pacifica Ltd, owned by Mr Charles P. Garrison of the U.S.A. for $243,750.
"The land, the subject of this application, forms part of a larger property owned
Trustwood was incorporated solely for the purpose of acquiring the
property and developing it for afforestation purposes. The company has entered into
several joint venture agreements with other parties, including overseas persons, in order
to reduce existing indebtedness and to assist in maintaining the integrity of the
development of the whole property as a commercial forest. The proposal represents the last
title owned by Trustwood for sale in Kiteroa Station in a joint venture arrangement with a
forest partner. It is stated the land is currently planted in two year old pinus radiata
Trustwood will be responsible for the day-to-day management of the forest and the two
companies "substantial development capital". Trustwood similarly sold interests
in its land overseas in October 1997, December 1996 and September 1996.
- Pelorus Properties (NZ) Ltd, a subsidiary of Pelorus Properties LLC owned
by David Teece, a New Zealand citizen residing in California, U.S.A., has
approval to acquire 413 hectares of land in Maungatapu Road, Rai Valley,
Marlborough for $288,000 for forestry planting. "A large part of the
property is covered in native forest, most of which is protected by forestry rights
granted for 999 years." Approximately 120 hectares is currently planted in pinus
radiata and a local forestry manager will be responsible for the day-to-day management and
operation of the property." The land is being acquired from the Marlborough Pine
- Southland Plantation Forest Company of New Zealand Ltd, of Japan, has
approval to acquire 408 hectares of land in Tahakopa Valley Road, Southland
for $522,000, for forestry. It adjoins conservation land. Southland Plantation is
owned by New Oji Paper Company Ltd (51%), Itochu Ltd (39%), Fuji
Xerox Co. Ltd (5%), and Fuji Xerox Office Supply Company Ltd (5%),
all of Japan. The company bought 203 hectares in Southland in May and 284 hectares in
Other rural land sales
- Carrington Farms Ltd, owned by Carrington Trustees Ltd whose beneficiaries
are members of the PHII Group of the U.S.A., has approval to acquire for $38,000,
0.0809 hectares of land at Inland Road, Doubtless Bay, Tokerau Beach,
Northland adjoining the 414 hectare property it acquired in 1995.
"Carrington Farms wish to acquire this further parcel of land (0.0809 hectares) in
order to improve the access to their beef farming operation. It is stated that since the
initial acquisition approximately $700,000 in development capital has been injected in
order to improve the property, stock numbers run on the property have increased from
nil-840 and four persons have been employed on a full time basis within the farming
activities undertaken on the property."
- Two residents of Japan who have been granted permanent residency in Aotearoa,
have approval to acquire five hectares of land on State Highway 10, Kerikeri,
Northland for $287,000. They intend to acquire the property as a residential
base/lifestyle block on which they will reside permanently.
- Corbans Wines Ltd, a subsidiary of DB Group Ltd which is 58.39%
owned by Asia Pacific Breweries Ltd, has approval to acquire 12 hectares of
land in Rapaura Road, Blenheim, Marlborough, for $570,000 "in order to
secure a supply of grapes for its wine business." Asia Pacific Breweries is 80%
owned by Heineken NV of the Netherlands and Fraser, Neave Ltd of Singapore.
It also bought land in Rapaura Road (eight hectares) in April 1998.