August 1994 decisions

August 1994 decisions

Tiong family (Malaysia) reorganises ownership of Ascot, Himley, Neil Group

The Tiong family of Malaysia, which owns Oregon Forestry (NZ) Ltd and Ernslaw One Ltd, was this month given approval to reorganise some of its holdings. Oregon owns 75.8% of Ascot Management Corporation New Zealand Ltd and fully owns Himley Enterprises No 6 Ltd. Himley in turn is the holding company for the Neil Group of companies “which carries on the business of residential, commercial and industrial land subdivision and development”. Ascot wanted to buy Himley for $17 million. To fund this, Ascot proposed issuing up to 140 million ordinary shares for “up to $28 million”, which Oregon would underwrite. In the event, Ascot decided against this acquisition, though as a “cash-box” company it is still looking for something to buy (“Ascot abandons Neil Group bid”, Press, 17/8/94, p.26). The Tiong family now have Aotearoa interests in forestry (through Oregon and Ernslaw One), ports (5.2% of South Port, the Bluff port operator, and 10.2% of Port of Tauranga [“Ernslaw expands”, Press, 30/9/94, p.20]), and fish farming (7.86% of Regal Salmon [“Singapore firm snaps up Regal shares”, Dominion, 29/3/93]). Their holdings are largely through Naraya Holdings, itself owned by Callander Ltd and Shiang Yang International (ibid).

Cadenza (Guernsey, U.S.A.) reorganises ownership of Wilson Neill

Cadenza International Ltd, of the U.S.A. is reorganising its ownership of Wilson Neill Ltd the Dunedin-based brewer. Its subsidiary, Cadenza Securities Trading International Ltd, is buying its parent’s 50.01% shareholding in Wilson Neill for $10,114,530. Though Cadenza is owned by Philip Adkins of the U.S.A. it is actually registered in the tax haven of Guernsey. Adkins bought Wilson Neill in 1992, being described in the media as a “high-flier”. Wilson Neill was in trouble over the acquisition of Cascade brewery in Tasmania under the ownership of (then) Brierley’s Magnum Corporation, now the DB Group. It was also under the threat of an insider-trading scandal involving former managing director and major shareholder, Colin Herbert, which has still to be fully settled. Cadenza announced in June that it was going to sell off Cascade and 36 hotels in Queensland, and all its debt, to a new Adkins company, Australian Brewing and Hospitality Group, of which Adkins would be Chairman and chief executive. ABH would pay Cadenza International $A11 million, plus $US300,000 a year plus Adkins’ out-of-pocket expenses in a “service agreement” to Cadenza Japan. Wilson Neill would be left as only a property company with properties in Aotearoa, Hawaii and California, and its shareholders would have ABH shares offered to them. The transfer turned out (as with most things this company has tried to do) to be less than straightforward. A New York Stock Exchange listed company, Leucadia National Corporation, took legal action in San Diego and Aotearoa to prevent the sale of the Australian assets saying Wilson Neill had guaranteed a debt it had contracted, connected with Wilson Neill’s investment in the Harbor Drive condominium project in San Diego. It claimed the sale of the Australian assets was an asset stripping exercise at its expense (implying that Wilson Neill would no longer have the money to honour its loan guarantee). Both the San Diego court and the High Court eventually rejected Leucadia’s injunction but not before Leucadia had alleged that the restructuring was no more than an expensive name change which left Wilson Neill insolvent to free the new entity of unsecured creditors like itself. It alleged the assets which were being sold for $A11 million, were worth $A24 million. Leucadia unsuccessfully appealed the High Court’s ruling, offering new evidence that the Australian assets were worth even more: between $A38 million and $A59.5 million. Wilson Neill countered saying their valuation was between nil and $A4.3 million. The president of the court, Sir Robin Cooke said the range of values given – of up to $A90 million – was “extraordinary”. Meanwhile Wilson Neill has a waiver from the Stock Exchange which expires on 31 January 1995, allowing it to have only one Aotearoa-resident director. (Ref: “Wilson Neill awaits court decision on payment”, Press, 3/3/94; “Cadenza vote on W Neill allowed”, Press, 25/6/94, p.29; “W Neill head labels action as ‘greenmail’”, Press, 27/7/94, p.36; “W Neill clear in U.S.”, Press, 29/7/94, p.20; “Court asked to halt Wilson Neill restructuring”, Independent, 19/8/94, p.1,2; “Restructuring of W Neill gets court go-ahead”, Press, 31/8/94, p.25; “Wilson Neill’s fate hangs in balance”, Press, 24/9/94, p.27; “W Neill restructuring cleared by Court”, Press, 1/10/94, p.29; “W Neill appointment”, Press, 10/10/93, p.33).

Comalco sets up own companies to upgrade Tiwai Point: locals unhappy

The company that is being set up by Comalco to carry out the $400 million upgrade of its Tiwai Point aluminium smelter is shown in this month’s decisions. TMB Engineering Partnership (owned in Australia and the U.S.A.) is 50/50 owned by Bechtel International Inc. of the U.S.A. and Engineering and Construction Holdings Ltd, a CRA Ltd subsidiary. E&CH also has approval to issue all of its share capital to The Barrier Corporation (Vic) Pty Ltd. In both cases the “expenditure to be incurred may exceed $10 million”. This structure has got locals in Invercargill most unhappy. Both local companies and unions have complained very loudly. The local businesses

“are unhappy with the approach Comalco has taken to the upgrade in setting up its own companies to oversee the project … An Invercargill consulting engineer believes the involvement of TMB Engineering undermines the potential for local businesses to be involved. ‘The logic is that TMB will attempt to do the construction using its own direct hired workforce – that to me seems to bypass the infrastructure we have here in town.’” (“Smelter upgrade work questioned”, Press, 8/10/94, p.28.)

Engineers’ Union national secretary, Rex Jones, said he understood

“American company Bechtel International received approval from the Immigration Service to recruit eight management positions from overseas… the immigration procedure was fast-tracked by a private arrangement between Bechtel and the Immigration Service.”(“Union attacks Tiwai staffing”, Press, 15/10/94, p.7.)

Guinness Peat takes over New Zealand Guardian Trust

Tyndall New Zealand Ltd, which is 56.5% owned by Guinness Peat Group Plc of the U.K. is taking over the New Zealand Guardian Trust Company Ltd for $20,000,000 as a means of expanding into Aotearoa. Guardian Trust belonged to the Scots insurance company General Accident Group and is the biggest trust company in Aotearoa, managing about $4.5 billion of funds. Tyndall, an Australian-based operation, managed only about $A500 million ($NZ614 million). GPG is run by Sir Ron Brierley and is reportedly looking at using its new trustee company to increase Tyndall’s stake in Perpetual Trustees from 10%. Under Australian law, a company cannot own greater than 10% of a trustee company unless it is itself a trustee company or acquires one. (“GPG subsidiary takes over Guardian Trust”, Press, 4/8/94, p.34; “GPG to increase Perpetual stake”, Independent, 5/8/94, p.3.)

Mirvac of Australia sets up in Aotearoa to develop services Department blocks

Mirvac Ltd of Australia and its “subsidiary companies and trusts” have approval to start up in Aotearoa with an initial capital of $70,000,000. It owns 0.3769 hectares of land in Auckland “on which it proposes to undertake construction of a multi-storey serviced residential block comprising 164 units.” Mirvac has “developed several serviced department blocks in Australia and now wishes to introduce the concept in New Zealand”.

Manders of the U.K. buy Morrison-PIM from Skellerup

Manders Holdings Ltd, a subsidiary of Manders PLC of the U.K. is buying Morrison-P.I.M. (Holdings) Ltd, a Skellerup Group Ltd subsidiary for $27,500,000. This will enable Manders to “expand its business operations in New Zealand” and provide it with an entry into the Australian market. Manders also recently acquired the Croda group of companies including its Aotearoa subsidiaries.

Agri-Trust set up to buy farms

An agribusiness Unit Trust, Agri-Trust has permission “to issue up to 50 million units to members of the public who may be overseas persons” for a price “to be advised”. Agri-trust will use the money to buy “various New Zealand farm properties particularly those currently owned by New Zealand Rural Properties Ltd.” It is not clear what the connection between the two companies is.

Other rural land

• Glenroy Station Ltd is being bought by a New Caledonian for $1,540,000. Glenroy Station, near Queenstown has 124 hectares of freehold land and 4,879 hectares of pastoral lease. The new owner, Georges Maxime Montagnat, “has considerable cash resources and will be able to develop the property to its full potential without having to worry about financial considerations.” His plans include diversifying the Station’s production, increasing its productive capacity, fencing off the area towards the back of the property for a wildlife park, continuing a horse-trekking tourist operation, and grape growing. It will be managed by D.J. and J. Scott who farm the adjoining Glenlee property.
• Ernslaw One Ltd, of Malaysia is buying yet more land for forestry development. This one is 993 hectares at Craigellachie RD 1, Lawrence, for $695,000.
• Two U.K. citizens who have taken up permanent residence are acquiring a 531 hectare farm on Sherwood Road, Waiau for $1,169,000. They are doing it through their company Dinvale Holdings Ltd.
• Blakely Pacific Ltd of the U.S.A. (as trustee of South Blakely Trust) is acquiring 342 hectares of land on Te Matai Road, near Te Puke for $1,650,000 for forestry purposes. Blakely is the company that was brought in by local Maori to buy half of Matakana Island after they forced the withdrawal of ITT Rayonier and Ernslaw One (see the March OIC decisions).
• A Swiss resident is buying 91 hectares of rural land including forestry assets at Motunau, North Canterbury for $285,000 via Southern Forestry No 27 Ltd.
• A Japanese and two Singaporeans whose names were originally withheld are buying two blocks of land on Lake Rotoiti via companies Omni Realty and Services Ltd, and Omni Resorts Ltd. The applicants’ names, obtained on appeal to the OIC, are Kazuyuki Ohashi of Japan and Rosalind and Shirley Chan, of Singapore. The first block of land is seven hectares known as “Moose Lodge” and the other is a (presumably nearby) block of 32 hectares, respectively. “The purchasers plan to increase the number of guest rooms” in the lodge, “build a new residence, operate Moose Lodges’ boat on the lake for lunch and dinner cruises and widen the access road to the lodge from the main highway”. On the 32 hectare block they “propose to develop various recreational facilities including a nine hole golf course, four tennis courts, a club house, a car parking area, a jogging track, a church, a 20 room sports hotel and a horse riding track which will be combined as part of the Moose Lodge operation”. $4,700,000 was to be paid for Moose Lodge, and $700,000 for the 32 hectare block – “well above the value of the property for farming purposes” according to the information supplied by the OIC.
• Two Hong Kong residents and one from the U.S.A. are buying 70% of Starlight Properties Ltd which owns an “orchard block” on 26 hectares of rural land at Waimate North Road, Kerikeri for $910,000.
• A further 20 hectares of forestry land in Broadwood, Far North District, is being sold overseas. This time it is in Iwitana Road and is being sold to a Hong Kong couple, via the company Glowmark Properties Ltd, for $75,000.
• Two U.S.A. residents, Mr Tracy W. Brash and Mrs Rebecca J. Kingsley-Brash, are buying the remaining 76% of Mille Vigne Del Sur Ltd which they do not already own, for $240,000. The company owns seven hectares of rural land in Marlborough to be used for wine making. The Brashes “have a number of wine related businesses in the U.S.A.” and “wish to acquire the land for wine making purposes and intend to export the wine produced to the U.S.A.”
• A Taiwanese is buying a four hectare block of land in Marshlands Road, Christchurch for $356,000 “for the cultivation of mushrooms and other vegetables” through the company Tien Treasures Ltd. Mushroom producing facilities already on the property will be upgraded and the previous owners will be employed on the farm and will train new employees. They will also “remain as consultants to the business”. “Mr Tien intends to produce the mushrooms for export to Asia on a long term basis.”

Westpac restructures subsidiaries

In internal restructuring, Westpac Group Investment -NZ- Ltd of Australia, having been set up by Westpac Overseas Holdings Pty Ltd with a capital of $100, is buying Westpac Holdings -NZ- Ltd for $494,000,000.

Driehoek Banket takes U.K. parent’s interest in NZ Wines and Spirits

And Driehoek Banket B V is taking over the 25% interest of its parent, International Distillers and Vintners Ltd of the U.K., in New Zealand Wines and Spirits Partnership. The other two owners are Gebroeders Steur B V (25%) and Wines and Spirits Holdings Ltd (50%). The value of the 25% interest was originally suppressed, but was released in October 1996 after appeal: $30,500,000.