Contact Energy Limited has approval to acquire Stratford Power Limited, which owns the Taranaki Combined Cycle Power Station on 9.5 hectares of land at 191 East Road, Stratford, Taranaki, for $500,000,000 from Natural Gas Corporation Holdings Limited, which is 66.05% owned by Australian Gas Light of Australia, 10.2% owned by the Hutt Mana Energy Trust of Aotearoa, and 23.75% owned by small shareholdings in Aotearoa.
“The vendor has indicated that it wants to sell these assets as part of a programme of divesting its electricity generation assets and to concentrate on energy infrastructure. The Applicant has achieved rapid and substantial growth in its retail electricity sales and customer base. The proposed acquisitions will enable the Applicant to secure further long-term access to electricity supply to meet existing and future demand.”
At the same time as selling the Stratford power station, NGC, which is pulling out of the electricity sector after disastrous experiences there (see for example our commentary for July 2001), also sold the Cobb Station, via its wholly-owned subsidiary, Cobb Power Limited, for $92.5 million to Trustpower (see “NGC Reaches Conditional Agreements for sale of TCC and Cobb Power Stations”, 23/12/02, http://www.agl.com.au/AGL/Press+Releases/23+December+2002.htm ). Contact also bid for the Cobb Station, and Genesis Power Limited bid for the Stratford station ( see “Contact and Genesis apply to acquire Taranaki Combined Cycle Thermal Generation Plant”, 19/11/02, http://www.idg.net.nz/pressroom.nsf/UNID/42D2EC76D05FC692CC256C7500815A0D!opendocument).
NGC still has substantial gas operations: “NGC owns and operates New Zealand’s 2,600km gas transmission system and 2,400km of distribution network throughout the North Island. NGC retails natural gas and LPG to over 100,000 customers throughout the North Island”, according to AGL’s web site.
According to the OIC, Contact Energy Limited is owned
[Decision number 200310011.]
Alesco Corporation Limited, owned in Australia, has approval to acquire Biolab Limited and TechDev company for $53,000,000 from Salmond Smith Biolab Limited, owned by the powerful Tiong Family of Malaysia. Alesco
“is engaged in the distribution of market leading industrial brands in niche markets in Australia. It presently operates in three divisions – branded building products, earthmoving tyres and automotive specialist. The Applicant proposes to acquire Biolab Limited, which is the largest supplier and distributor of scientific consumables and instruments to the biotechnology and scientific industries in both Australia and New Zealand. The acquisition will provide the Applicant with a fourth division that fits its strategic objective of investing in industrial distribution companies with high market shares in niche markets.”
This was one of Salmond Smith Biolab’s most important subsidiaries. For activities of two other Tiong subsidiaries, see the acquisition of a forestry nursery below.
[Decision number 200310014.]
Jossco NZ Limited, owned by Andrew H P Joseph of Australia, has approval to acquire 0.85 hectares of leasehold land at 198 James Fletcher Drive, Otahuhu, Auckland for $872,762 from Commodity Storage Limited of Aotearoa.
“The Applicant was granted consent on 7 September 2001 to acquire a leasehold interest in the subject property. The acquisition of the leasehold interest did not proceed and the Applicant subsequently continued to [sic] the property on a month by month basis. The property is currently utilised for bulk grain storage and commercial premises by the Applicant. The Applicant, as part of their long-term business strategy has decided to enter into a lease agreement for a term of up to 6 years.
The new lease arrangement will solidify the existing operations of Jossco and is likely to see further expansion within the business and enable it to guarantee a high level of biosecurity assurance to its customers and regulatory authorities.
The Applicant asserts it would be unnecessarily detrimental for the business if the applicant was not able to renew its existing lease of the premises. As it is a specialised facility, replacement would be almost impossible to achieve without building another similar facility. To relocate the operation would involve the lowering of biosecurity standards of the product stored, increased cost to the New Zealand industry because of lower capacity of available storage, and potential detrimental impact on business growth.”
In September 2001 we reported that Jossco NZ Ltd, then owned 50% by Andrew H.P. Joseph and 11.055% by Christopher Campbell Lane, both of Australia, and 27.89% by Terence James O’Connor and 11.055% by Edmund Francis Bailey, both of Aotearoa, had gained approval to acquire the lease over this land from Commodity Storage Ltd for $337,500. The price has increased two-and-a-half times in a year and a half. They said that
“The property is the only specialised grain storage facility in Auckland. It is unique in its design and enables the applicant company to deliver a high level of biosecurity assurance to its customers and regulatory authorities.”
Jossco “imports and exports a wide range of agricultural based commodities” and already leases the storage facility for bulk grain storage and commercial offices. It wishes to renew the lease for up to another six years, which requires OIC consent.
“As it is a specialised facility, replacement would be almost impossible to achieve without building another similar facility. To relocate the operation would involve the lowering of biosecurity standards of the product stored, increased cost to the New Zealand industry because of lower capacity of available storage, and potential detrimental impact on business growth.”
[Decision number 200310012.]
Nikken Foods Co Ltd, owned 74% by Hirotomo Ochi of Japan and the remaining 26% by minority shareholders in Japan, has approval to acquire
“The Applicant was founded in 1964 and has subsequently become a pioneer in the development, manufacture and marketing of natural food flavourings. The Applicant’s aim is to supply food products that are beneficial to health and it manufactures more than 1,000 natural flavourings. Within the Applicant’s group structure there is a high importance on research and development including the Institute for the Control of Ageing, the Research Institute for Future in Foods and the Health and Fitness Institute.
The Applicant’s chairman has discovered North Otago the perfect setting for the international expansion of the research and development programme. In 2000, the Applicant acquired a 29.5328 hectare property near Oamaru known as Teschemakers to establish an international college for post-graduate international and New Zealand students of health science. The Applicant has also obtained consent to acquire adjoining farm land for the purposes of progressing its work in sustainable organic and healthy farming (13.2876 hectares and 21.7405 hectares). The Applicant is also undertaking developments on the farm as part of the college, utilising the crop, stock, dairy and vegetables to establish an organic farm network.
This purchase is the second [and third] acquisition in a land purchasing programme. The Applicant proposes to acquire approximately 250 hectares in the North Otago region, within a 5 kilometre radius of the Teschemakers college. It is proposed that the land to be acquired will be utilised for experimental/research purposes, as buffer land and for commercial production. The Applicant envisages that the international college will encourage and promote post-graduate study, research and development in the area of organics and healthy-living. This will provide demand for workable tracts of land with boundaries free of contamination from insecticides, herbicides and genetically engineered plants and crops.
The Applicant has advised that reconstruction of the Teschemakers College is underway with a view to opening for courses in late 2003. The subject property is likely to be used for experimental/research purposes once the college opens. In the interim the land will continue to be used for market gardening.
The overall project is described as “the Teschemakers educational facility and the Business Park facility”
See our commentary for August 2002 for Nikken’s last land purchase. [Decisions numbered 200310013 and 200310023.]
UBS Timber Investors of the U.S.A. has approval to acquire trees in and a forestry right over 6,400 hectares of mature age trees of Tahorakuri forest in the Central North Island, Bay of Plenty for $81,227,436 from Fletcher Challenge Forests Industries Limited.
“UBS Timber Investors (UBS) is an investment fund established to focus on timber investments in the Southern Hemisphere. UBS Timber Investors generates investment returns from the acquisition and management of forests and associated processing facilities located in the United States and the Southern Hemisphere… The cutting rights will entitle the Applicant to harvest designated trees, at maturity, over the next thirteen years. FCF which will manage the trees and provide ancillary services to the Applicant will have an option to purchase 50 percent of the harvested crop, with the balance of the crop offered through an open market tender.”
Fletcher Forests, following its failure to purchase the Central North Island Forests after the collapse of its joint venture with Citic (see our commentary for July 2002), has decided to sell all its forests.
UBS subsidiaries are already major owners of forests in Aotearoa. For example, in March 2002, we reported that UBS Mangakahia Forest Venture Ltd had received approval to acquire 27,128 hectares of freehold land and 1,409 hectares of leasehold land at Mangakahia Forest, Northland for a suppressed amount from Shell Forestry New Zealand Limited.
According to the OIC, Fletcher Forests is owned as follows:
· 0.0356% - France;
· 58.6223% - Aotearoa.
[Decision number 200310021.]
Forestart Limited, owned by the Tiong Family of Malaysia, has approval to acquire 14.5 hectares at Hilderthorpe, Ferry Road, Oamaru, Otago for $513,000 from Fords Nurseries Limited, owned by AW and KA Ford of Aotearoa.
“Forestart Limited, commenced operations in 1994 when a joint venture was established with the vendors (Ford’s) to establish a world class containerised seedling nursery on the land owned by the vendors. The joint venture was established with the intention of growing planting stock for the forestry development activities of Ernslaw One Ltd and other forestry companies. The afforestation expansion plans of Ernslaw, and other customers have since wound down and the facility is now under utilised. Consequently it has progressively become less profitable.
Accordingly, the nursery operation needs new direction and an expansion of the business base to survive. The vendors do not wish to invest further capital into the joint venture. The Applicant proposes to acquire their 50 percent shareholding of the joint venture and the land that the nursery occupies to ensure the continued operational security of the nursery.
Forestart’s new business plan incorporates the expansion and diversification of the business into supplying Douglas fir stock and pinus pinea (pine nut), and the development of export markets in North America for its stock.”
Ernslaw One is another Tiong company.
[Decision number 200310022.]
D R Wines Limited, owned 75% by Julian Hart Robertson and 25% by the Oliver Family Trust, both of the U.S.A., has approval to acquire 15 hectares at Puruatanga Road, Martinborough and 8.1 hectares of Profit a Prendre (growing rights on the land) at Puruatanga Road, Martinborough, Wairarapa for a suppressed amount from Dry River Wines Limited, Dry River Estate Limited and Dry River Trust of Aotearoa.
Although the approval is only for the acquisition of the land, the description implies that it is also for the operation of Dry River Wines:
“The Applicant proposes to further expand its existing viticulture interests through the acquisition of Dry River Wines. It is proposed that the existing business will be further developed and enhanced, in particular through further building of the brand name and continued production of a premium product. Dry River is a leading producer of varieties for which the Martinborough region is renowned, producing some of New Zealand’s best Riesling, Pinot Gris, Gewurztraminer, Syrah, Pinot Noir, Chardonnay and dessert wines. Dry River Wines’ chief winemaker and viticulturist will remain with the business. The Applicant has the financial capacity and commitment to enhance the business operations of Dry River and the quality of the wines produced.”
Wine writer for The Independent, Bob Campbell, describes Dry River as a “cult New Zealand winery” and “New Zealand’s most precious vinous asset”:
“This small Martinborough winery makes only 2,000-3,000 cases of wine from its 10-hectare vineyard. In size and sales volume, the winery is a very small wine producer. In terms of quality winemaking, it is a colossus. I have for years rated Dry River riesling, pinot gris, gwúrztramminer and syrah as this country’s best examples of their styles…
I also rate Dry River chardonnay, sauvignon blanc and pinot noir as ‘first division’ wines capable of being the best in some vintages. A Dry River botrytised Riesling earned the highest mark I have given to a New Zealand dessert wine.
Other wineries excel with one or perhaps two wines. Dry River is the extraordinary exception, managing to produce winners across its entire product range. The wines are always in high demand, reinforcing my view that they are made by our only true cult winery.”
He attributes the quality to winemaker and (now former) owner, Neil McCallum, former DSIR scientist. McCallum has agreed with the new owners to stay involved for four to five years. However fans are worried about the quality being maintained, and the likelihood of price increases. (The Independent, “Cry me a river: Cult winery in US hands”, by Bob Campbell MW, 26/2/2003, p.16.)
This is just the latest acquisition by billionaire Robertson, the previous one being in November 2002 in Hawkes Bay – see our commentary for that month for further details. [Decision number 200310019.]
· Blake Family Vineyard Limited, owned by Mark Blake of the U.S.A., has approval to acquire 6.9 hectares of freehold situated at Gimblett Road, Hastings, Hawkes Bay for $1,687,500 from Thornbury Vineyards Limited of Aotearoa. “The subject property is currently utilised by the vendor for growing Chardonnay, Cabernet Sauvignon, Cabernet Franc and Merlot grapes which are used in the production of wine under the Thornbury Wines label. The Applicant does not intend, in the short to medium term to make any material change to the property’s current use. The Applicant anticipates the proposed acquisition will add some economies of scale to its existing viticultural operation which is also located in Gimblett Road. In the longer term the Applicant may replant the vineyard with new clones utilising management techniques that it is currently trialing at its existing vineyard. These trials involve either:
(a) reducing the yield but improving the quality of the grapes grown; or
(b) increasing the yield through denser planting of vines with no corresponding decrease in the quality of the wine produced.
However, there is no certainty that this will occur as it is dependent on the trial results which are unlikely to be known for approximately 6 to 7 years.
The intention of the Applicant is to ultimately utilise the grapes grown on the property to produce greater quantity of its own branded lines of premium wine for use in the world class fishing and sporting facility known as Poronui Ranch located near Taupo. Poronui Ranch is owned and operated by Poronui Station Limited, and is controlled by Mark Blake, the sole shareholder of Blake Family Vineyard Limited.
The vendors, Thornbury Vineyards Limited (Thornbury) wish to realise their investment in the Hastings property to enable them to concentrate on their viticultural operation in Marlborough. The sale of the Gimblett Road property will enable Thornbury to repay some debt and to fund the development of their Marlborough viticultural operation.”
Blake last received OIC approval for a land purchase in July 2002 – see our commentary for that month for further details, and for details of his increasing holdings in Aotearoa. [Decision number 200310010.]
· Beringer Blass Wine Estates Limited of Australia has approval to acquire 175 hectares of leasehold at Northbank Road, Marlborough for $16,087,795 from Winestock SPC 2 Pty Limited, which is 50% owned by Stockwell Holdings Limited and 50% by Ising Unit Trust, both of Australia.
The purchase by Winestock of the land being leased is approved in three further decisions:
· 40 hectares of freehold and 119 hectares of leasehold at Northbank Road, Marlborough, for $13,500,000 from Peter Yealands of Aotearoa;
· 119 hectares of freehold at Northbank Road, Marlborough, for $4,275,000 from Richard Miles Adams and Simon Murray Adams of Aotearoa (this is the same land as the 119 hectares of leasehold in the previous decision);
· 16 hectares of Crown Licence situated at Northbank Road, Marlborough.
“The proposal arises from an agreement entered into between Beringer Blass Wine Estates Limited and Winestock Securities Pty Limited and will enable Beringer to expand its New Zealand wine production business. Winestock specialise in asset management and financing of vineyards, wineries and bulk wine sales and has facilitated vineyard acquisition and development transactions with Beringer in Australia. It is proposed that Winestock will acquire the properties and Beringer will lease them under an operating lease which includes an option for Beringer to purchase the properties. The operating lease structure will enable Beringer to maintain its existing financial gearing ratios while at the same time growing its business base in New Zealand. This will support Beringer’s need to increase its grape supply to meet its increasing export demands and increase its self sufficiency in Marlborough Sauvignon Blanc with resultant benefits.”
[Decisions numbered 200310015, 200310016, 200310017, and 200310018.]
Richard Schomburg of the U.S.A. has approval to acquire 50% of Ben More Graziers (1989) Limited, which owns 244 hectares of freehold and 1,312.812 hectares of Pastoral Lease at Ben More Station, Springfield, Canterbury, for $1,350,000 from Ben More Holdings Limited owned by the James Family of Aotearoa.
Ben More Station has experienced difficulty trading profitably due to excessive debt levels. There is a need for additional equity to ensure the ongoing viability of the current farming operation. The vendor and the Applicant have reached an agreement whereby the Applicant will inject sufficient equity to enable Ben More Graziers (1989) Limited to retire its debt. The substantial monies that are currently required to service debt will now be committed for capital development of the property. A comprehensive Farm Management Plan has been produced which outlines how the Applicant’s capital injection will enable the further development of the farm and farm maintenance leading to an increased stock carrying capacity. It is further proposed to diversify the land use through the establishment of a safari hunting/trophy park. The proposed safari hunting/trophy park, to be managed by Game Ranch International Limited, is likely to compliment the farming operation giving the area multi-use and the costs associated can be absorbed into both developments.
According to official New Zealand Companies Office records, Game Ranch International Limited is 50% owned by the contact for this application, John Angland, and its registered office is at his address, Ronald W. Angland & Son, Solicitors, Leeston. The other 50% is owned by Phillip Boyd Wilson of Christchurch.
Wilson and another company associated with him, New Zealand Hunting and Fishing Ltd, are also involved in the 9,300 hectare Glenhope Station, 90% owned by Douglas Randles of the U.S.A., whose acquisition was approved by the OIC in September 1998. See our commentary for that month for further details. According to the Royal Forest and Bird Protection Society (“Foreign Ownership of Pastoral Leases and Lands in the South Island High Country: Briefing Paper”, December 2001), “Randles has fenced off the traditional walking access to the Magadalen Valley to preserve this for his clients. DoC has had to re-route track. He has denied access to a DoC hut sited on pastoral lease land. This is controversial with hunters and trampers.”
In November 2000, Schomburg was convicted in Montana, U.S.A., after pleading guilty to illegally buying and receiving an illegal antelope in Illinois from Montana. He was fined $15,000 and ordered to serve one year probation during which time he could not hunt, or trap in the U.S. Schomburg failed to disclose this when providing a certificate of “good character” to the OIC (see also Sunday Star-Times, 23/11/2003, “Lawbreaking American hunter may be forced out of NZ land deal”, by Ruth Laugeson).
However it appears he did not have to withdraw from his hunting addiction: between 25/4/01 and 11/5/01 he was hunting in the South Island “facilitated” by New Zealand Hunting and Fishing Unlimited (sic), including Phil Wilson, for Red and Fallow Deer, Elk, Goat, Tahr, and Wild Pigs (“Hog”). He returned again from 15/6/02 to 27/6/02, this time to “New Zealand - NE side of NZ” (perhaps that means he was hunting in Auckland). (See http://www.huntingreport.com/mass_reports.cfm?RequestTimeout=1000&hntcoun=New%20Zealand).
He was however associated with others indicted under the Endangered Species Act as well as the Lacey Act under which he was convicted. According to the Federal Wildlife Officers Association, in its newsletter (Volume 15, Number 2, Summer 2002 http://www.fwoa.org/news/fwoanws28c.html):
In August 2000, Montana outfitter and guide Vern Smith; outfitter, guide and taxidermist Joe Thomas; and taxidermist Catherine Thomas; hunters/clients Marvin Woods and Richard Schomburg were indicted by a federal grand jury in Montana for felony Lacey Act and conspiracy violations involving Smith and Thomas’ unlawful sale of two mountain lions, two bobcats and an antelope that had been illegally taken and shipped in interstate commerce. In a second indictment (also in August 2000), Joe Thomas, Louis Van der Merwe, a Zimbabwe hunting outfitter and guide; Ray Westerman, a leopard hunter; and Dick Dean Andersen were indicted for felony Lacey Act and conspiracy charges involving Van der Merwe and Thomas’ illegal transportation and sale of two leopard hides, sold in violation of the Endangered Species Act (ESA) and the Lacey Act. In a third indictment (October 2000), Smith, Thomas, and Schomburg were indicted for felony Lacey Act and conspiracy violations involving Smith and Thomas illegally providing licenses to Schomburg and a second hunter, Ken Dunbar, so Dunbar and Schomburg could illegally take buck antelope in 1994 and 1995.
In November 2000, Schomburg pled guilty to one Lacey Act misdemeanor count for illegally buying and receiving an illegal antelope in Illinois from Montana. Schomburg was fined $15,000 and ordered to serve one year probation during which time Schomburg cannot hunt, or trap in the U.S.
In November 2000, Ken Dunbar pled guilty to two Montana state charges of illegally possessing two unlawfully taken antelope. Dunbar’s hunting privileges were revoked for two years and was fined $1,550.
On September 17, 2001 Joe Thomas pled guilty in federal District Court in Billings, MT to five felony counts. The first count involved Thomas’ sale of two illegally taken bobcats by Schomburg and Woods. The second count involved Thomas’ conspiracy with Schomburg and Woods. The third count involved Thomas’ purchase of three leopard skins from Van der Merwe in Zimbabwe in violation of the Lacey Act and the ESA. The fourth count involved Thomas’ conspiracy with Smith and Schomburg to sell Schomburg and Dunbar antelope by selling Schomburg resident Montana antelope licenses. The fifth count involved Thomas’ actual sale of two antelope to Schomburg. Judge Cebull ordered Thomas to serve six months home detention and ordered Thomas to wear an electronic monitoring device, pay $1,600 in restitution to the Montana Division of Fish, Wildlife, and Parks, pay $500 in special assessment fees and placed Thomas on three years probation for each of the five counts to run concurrently.
During the three year term of probation, Smith cannot possess a firearm violate any state, local or federal laws and cannot hunt, fish, trap or accompany anyone hunting, fishing or trapping anywhere in the world. In a statement to the defendant Smith, Judge Cebull said, “I think you have shown a blatant disregard for both Montana and federal wildlife laws. Your conduct gives hunters and legal outfitters a bad name.”
The Texas hunter, Stephen Milano, pled guilty to one state count of illegally possessing and transporting a mountain lion. Milano paid a $1,050 fine and his hunting privileges were revoked for two years.
On September 19, 2001, hunter Marvin Woods pled guilty to one federal misdemeanor count of buying and receiving one illegally taken and possessed bobcat from Montana to Illinois. On November 30, 2001, Woods was ordered to pay a $500 fine, $25 in special assessment fees, placed on one year probation and ordered not to hunt, fish, trap or accompany anyone hunting, fishing or trapping within the 50 United States.
Also on September 19, 2001, taxidermist Cathy Thomas pled guilty to one federal misdemeanor count of attempting to sell one illegally possessed and transported antelope. Cathy Thomas was ordered to serve one year of probation, and pay a $25 special assessment fee. During her period of probation, Thomas cannot possess a firearm, violate any state, local or federal laws and cannot hunt, fish, trap or accompany anyone hunting, fishing or trapping, anywhere in the world.
On September 24, 2001, Ray Westerman agreed to pay a $2,500 violation notice for his illegal purchase of a mounted leopard in violation of the ESA, and forfeit/abandon to the FWS the seven foot leopard he had bought from Thomas. The felony counts against Westerman were then dismissed.
On September 25, 2001 after a two-day trial, Dick Dean Anderson was acquitted of one felony conspiracy and two felony Lacey Act violations involving his buying and selling of a leopard hide from Joe Thomas.
Louis Petrus Van der Merwe, a Zimbabwe citizen, has failed to appear and a federal warrant has been issued for his arrest.
[Decision number 200310024.]
· Debo Yang and Huiming Mai of the Philippines have approval to acquire 7.5 hectares at 2982 State Highway 1, Huntly, Waikato for $410,625 from Neville Wayne McQuoid and Christine McQuoid of Aotearoa. “The Applicants arrived in New Zealand in September 2000 and are currently residing in New Zealand on a Long Term Business Visa. They both intend to apply for New Zealand permanent residency. The Applicants propose to develop the property, which is currently as a lifestyle property with a small number of cattle grazing the land into an organic vegetable operation, and to keep free range chickens and establish a pig farming operation. It is proposed to erect a hot house on the property for the growing of vegetables. It is also proposed to develop a business of exporting vacuum packaged organically grown vegetables to the Philippines for hotel and restaurant consumption.” [Decision number 200310020.]
The number of investments approved in the year to February 2003 is lower than for the previous February year, but the gross and net values cannot be compared because the total is suppressed for 2003.
Investment involving land
Both gross and net sales of land approved by the OIC during the years to date to February have decreased in area substantially. Refusals (above) have fallen in number, area and value – to zero.