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This month’s release of decisions is distinguished by the number of deletions. Out of twenty decisions, nine (almost half) have been withheld by the OIC – all in full. We trust this is not the result of a policy change by the Commission. On appeal, in July five were released in full and two still with “consideration” deleted. The decisions that were released on appeal relate to Vesteys/Weddel, MGRC and ITT (Gisborne): see below. A further decision was released in March 1995 after appeal to the Ombudsman. Vesteys restructures its meat processing business Aotearoa Primary Products, a Vestey Group (U.K.) subsidiary, is acquiring all the assets of Weddel New Zealand Ltd, another Vestey subsidiary. This comprises the meat processing and export business carried on at plants in Whangarei, Cambridge and Feilding; a by-products division carried on principally at Hastings; and the Head Office Management Division carried on in Wellington. The companies involved are Aotearoa Primary Products (Hastings) Ltd, Aotearoa Primary Products (Whangarei) Ltd, Aotearoa Primary Products (Feilding) Ltd, and Aotearoa Primary Products (Cambridge) Ltd. The background to this is that Vesteys was in March reported to be planning to sell off most of its Australian and Asian meat product and food trading operations in a public float. Union International, controlled by Vesteys, was preparing to list Angliss Pacific on the Australian Stock Exchange. It was selling most of its Australian assets as part of a restructuring agreement between the Vestey family and its banks in 1992. They would retain an undetermined stake after the float (National Business Review, “Vestey interests plan Australian float for Angliss Pacific”, 4/3/94). In this country, as well as Vesteys being in trouble, the meat industry is said by one agricultural economist to be “in crisis” and technically bankrupt. This is due to falling meat prices, and excess competition, leading to the crash of the Fortex group. (Press, “Meat industry ‘in crisis’”, 5/7/94, p.3). One farmer said it was “fairly well known that the meat industry owed about $1.4 billion to the banking system” yet “if all freezing works were sold they would realise only about $800 million” and “new state-of-the-art freezing works could be built to cover the whole of New Zealand’s kill for half the price of the indebtedness.” (Press, “NI farmers question price gap”, 27/5/94, p.32.) In May it was reported that Vesteys was expected to announce a “partial” sale of its equity, but withhold from a public share float its Tomoana meat plant at Hastings, and its neighbouring Kaiti plant at Gisborne. It had planned to float the three companies that are subject to the OIC decisions. Weddel is the fourth-largest New Zealand meat producer in terms of total assets after Alliance, AFFCO and PPCS, and processes 10.7% of the country’s lambs, 11.6% of its sheep, 16.9% of its cattle and 28.6% of its calves. It was established in 1911 by the Vestey family and was long a part of the colonial ties of our meat industry to the British market. (Press, “NZ’s fourth-largest meat producer ready to sell some freezing works”, 21/5/94, p.28.) Bernard Matthews of U.K. buys Advanced Foods from Meat Board U.K. butcher, Bernard Matthews PLC, 41.1% owned by B.T. Matthews of the U.K., is buying out Advanced Foods of New Zealand Ltd, a subsidiary of the New Zealand Meat Producers Board for $40 million. This includes 19.2104 hectares of land in Waipukurau. The OIC notes that this replaces a previous consent dated 23/12/93 – one which was evidently withheld since we never received it. According to the Independent, the company employs 250 people at the peak of the season and was set up 10 years ago to produce Bernard Matthews boneless lamb roasts under licence (“Meat Board offloads export unit”, 15/4/94, p.28). Kiwi Income Property Trust buys Majestic Centre in Wellington from DFC The Majestic Centre, Wellington, is being purchased for “approximately” $48,550,000 by Waihara Holdings Ltd, 50% owned by Kiwi Income Property Trust (KIPT), and 50% by the FCMI Group of Canada. KIPT already owns the Plaza, Palmerston North, and KMart, Porirua, and commercial buildings in Auckland and Christchurch (see OIC decisions in November and December 1993). As part of this transaction, Waihara is issuing 10 million $1 ordinary A and B shares to each of KIPT and Wynford Holdings Ltd (a FCMI subsidiary), and 12,225,000 redeemable preference shares to KIPT. Waihara also has the OIC’s “consent if necessary” to purchase a $48,550,000 debt from DFC New Zealand Ltd for $48,550,000. (The building is the “final significant property owned by the DFC” – Press, 25/2/94, “Kiwi Trust confirms Majestic Centre buy”.) In December 1993, the Majestic Centre was the centre of complaints by a Wellington real estate agent that the Government Valuation (GV) of Wellington buildings were “on a different planet” when compared to the prices actually being paid. David Taylor of Raine and Horne gave the example of the Majestic Centre (which he was trying to sell). The 28 storey building, completed in 1991 for around $200 million, has a GV of $17 million. Such gaps between GV and sale prices “are likely to jeopardise the recovery of the local property market. Mr Taylor said foreign buyers, especially, were likely to lose confidence in Wellington property if they were asked to pay double the price of the new GVs on some of the city’s major buildings.” (Press, 15/12/93, “Wellington property valuations questioned”.) Clearly Mr Taylor need not have worried: he or one of his colleagues has been very persuasive. According to the Press (30/10/93, “Kiwi Income Property Trust seeking $46m through issue”), the manager of KIPT is Kiwi Income Properties (KIP) whose directors are Robert Narev, an Auckland lawyer, Ross Green, executive director, James Macaulay, chairman of Mercury Power, and Murray Valentine, chairman of The Helicopter Line. KIP is equally controlled by interests associated with Green and KIPT’s managing director, Richard Didsbury, and FCMI Corporation of Canada. FCMI’s controlling shareholder is Albert Friedberg (Press, 25/2/94, “Kiwi Trust confirms Majestic Centre buy”). Allco of Australia in underwriting arrangement Allco Finance (NZ) Ltd, a subsidiary of Allco Overseas Holdings Ltd, part of the Allco Group of Australia, has been given consent to enter into an underwriting arrangement “in respect of certain securities to be issued by an off-shore entity.” MRGC of U.S.A. buys more land in Marlborough The U.S.A. forestry company, MRGC Company appears again, buying land in Marlborough, presumably for forestry. The land is 2738.1 hectares and $1.4 million is being paid for it. What is particularly interesting about this decision is that it appears (though it is not clear) to show the names behind MRGC. The sale is to “MRGC and Associated parties”, named as: Judy Trust for David S. Quinn (1.54%), for John V. Quinn (3.07%), and for Rebecca B. Quinn (3.07%); J.D. Children’s Trust for William C Crow, John T. Crow, Michael T. Crow and Colin C. Crow (each 3.07%); David Quinn Trust (1.54%), Yakovich Corporation (2.5%), Johnson Family Northwest Investment Corporation (21.5%), Reid Inc (1.0%), Green Crow Pacific Ltd (3.5%), Ring Management Company Incorporated (25.0%) and RDMCO International Incorporated (25.0%). Previously we had been told the MRGC was a 50/50 joint venture between Merrill and Ring Inc, and Green Crow Corporation. Other land sales for forestry: Southland Plantation, Tasman, RII, ITT Rayonier A number of familiar names appear in a flurry of forestry developments:
Milburn buys Cape Foulwind land of “great strategic value” from Landcorp Milburn is also being sold three parcels of land in the Nelson Land Registry area by Landcorp Property Ltd. They are of 887 square metres ($260+GST), 2.8702 hectares ($5740+GST) and 1.3668 hectares ($2500+GST). They are “of great strategic value to Milburn’s continued operation at the cement works at Cape Foulwind. Landcorp Property Ltd (the vendor) recognised this and first approached Milburn to offer these sections for sale prior to undertaking sales marketing proposals. The proposal will allow Milburn to formalise present arrangements in respect to usage of one of the blocks, and will provide future access for possible expansion of their activities with the resultant flow on benefits.” We hope Landcorp got a “strategic” price given Milburn’s special interest and privileged position.
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