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| Sea Shuttles owner increases shareholding
The ill-fated Cook Strait fast ferry venture, Sea Shuttles (NZ) Ltd features this month. Its 60% owner, J.C. Lopez Mena of Uruguay was given approval to take up an issue of a further 1,877,717 $1 ordinary shares for $1,877,717 taking his ownership to “approximately 66.9%“. At that stage it could boast it employed about 80 people. Since then it has withdrawn from the service, abandoning it to competitor New Zealand Rail, after sacking most of them in a public and acrimonious fallout between the Uruguayans and the local partner, Brooke McKenzie. This followed continuing mechanical problems with the ship. Lopez Mena runs similar ferries in South America. Regency Duty Free Stores taken over by Allders of the U.K. Regency Duty Free Stores Ltd is being taken over by Allders Plc, a U.K. publicly listed company, for $26,000,000. Modestly, Allders told the OIC that it “is one of the best known and most successful operators of duty free stores in the world”. The purchase is via Allders’ subsidiary, Allders Holdings Ltd. Associate Gold Fields of Australia takes over Kiwi International Associated Gold Fields No Liability (AGF), an Australian mining company has approval to take over Kiwi International Resources No Liability (KIR), a New Zealand public listed company by issuing shares in AGF in a ratio not determined at the time of the application. (At 7 April, the valuation required to determine the ratio still had not been completed according to the Press: “Kiwi Resources share options go begging”, 7/04/95, p.32. The value was released in the OIC’s report to Parliament for the period 1 July 1995 to 31 December 1995: $34,434,791.) The reason given for the takeover is that each company owns a 42.5% interest in a “significant gold development project in Ghana“. “The directors of AGF consider that if the Ghana project and the resultant cashflow from developing the Ghana project is held and managed by a single combined entity, the foundation will be laid for the development of a much stronger and more valuable company than would be the case if the two companies sought to continue to develop their respective interests in the Ghana project.” The project in Ghana is the Obotan licence where 936,000 ounces of gold have been identified in just one area (Nkran Hill) and smaller reserves nearby. The mine was expected to cost $35.5 million to develop. It will be an open pit mine, moving 800,000 tonnes of ore a year, and is planned to start production in March 1996. According to the Press, (“Kiwi Int seeks stronger equity base”, 3/2/95, p.20) the pressure for the merger came from financial institutions not willing to finance the deal for two smaller companies, and worried that KIR’s plan to raise money, share options that converted in March, would not be taken up by enough option holders. This fear was upheld in April when less than a quarter of the options were exercised, not least because KIR chairman, David Kennedy, exercised only 500,000 of his 19 million options. Only $2.62 million out of a possible $11.8 million was raised. Both companies are in any case controlled by Kennedy. His family company, Moondance ventures owns 65% of KIR’s shares. KIR owns 20% of AGF and Moondance owns 13% directly. A “friendly party” owns another 5%. Kennedy will end up with 30% to 35% of the merged company. Ranger Minerals, an Australian mining company also with interests in Ghana, is a “significant minor shareholder” in KIR. AGF has another gold prospecting interest in the Santa Andrea prospect south of Santiago in Chile, along with Summit Gold and Spectrum Mining. It is also planning a mine at Peak Hills in New South Wales, Australia. (References: Press, “Kiwi Res turns from profit to $406,000 loss”, 14/12/94, p.33; “Kiwi Int plans for Ghana gold”, 1/2/95, p.25; “Summit says St Andrea encouraging”, 1/2/95, p.29; “Kiwi Int seeks stronger equity base”, 3/2/95, p.20; “Drilling tests ‘encouraging’”, 3/3/95, p.14; “Delay in Kiwi Int merger valuations”, 6/3/95, p.25; “Interim loss for Spectrum”, 9/3/95, p.34; “Kiwi Resources share options go begging”, 7/4/95, p.32.) Restech International restructured; HK, Australia, Cook Islands connections In an internal restructuring, Sharrow Ltd, a private company operated by TrustNet (Hong Kong) Ltd is taking over the 31,147,030 shares in Restech International Ltd previously held by three unnamed overseas companies in trust for Sharrow. Sharrow in turn holds the shares in trust for the beneficiaries of two private overseas trusts. Restech is a mining company based in Sydney, though listed on the New Zealand Stock Exchange and with most of its mining activities in Australia and Canada. It has a subsidiary, Technomin International, which is incorporated in the Cook Islands (no prizes for guessing why). In October last year, Restech sold its 60% holding in Hunter Resources for $46 million through Technomin and managed to get a ruling from the Australian Tax Office that no tax was payable on the profits, because Technomin was a resident of Australia. (Press, “Restech gets ruling on Hunter shares”, 13/10/94, p.36.) Restech is no stranger to such controversy. In January 1994 it was censured by the New Zealand Stock Exchange for issuing a notice without obtaining the Exchange’s approval. The panel said that Restech’s directors had provided shareholders with insufficient information to enable them to make a fully informed decision on the Hunter Resources shareholding, and had openly disregarded the request of the panel to provide sufficient information. This followed a two-year battle with the Australian Securities Commission (ASC). The company was delisted from the Australian exchange after being suspended for most of 1992. The ASC alleged that the restructuring of Technomin Australia NL was oppressive and unfairly prejudicial to minority shareholders. (Press, “Exchange censures Restech for issuing notice without approval”, 22/01/94; “Settlement of dispute gives Restech half-year profit”, 10/3/94.) SmithKline Beecham of UK buys Sterling Winthrop from Kodak Retrospective consent is given to SmithKline Beecham Plc of the U.K. to take over Sterling Winthrop (NZ) Ltd from its previous owners, Eastman Kodak of the U.S.A. for $US25,700,000. “The acquisition is part of the worldwide acquisition by SmithKline of the over the counter pharmaceutical business of the Sterling Winthrop ‘group’. The Commission is further advised that consent was not sought at the time of the acquisition as it was originally thought that the consideration to be apportioned to the New Zealand acquisition did not exceed $10 million.” Only out by a factor of about four. Is their accounting really that bad? Premier Hotels (Japan) increases ownership of Christchurch Casinos Ownership of Christchurch Casinos Ltd, the owner of Christchurch’s casino, is changing. However, just what is happening is confused. The OIC approved Premier Hotels (Christchurch) Ltd acquiring a further 7.66% of the shares for $3,679,987. Just who it is acquiring the shares from is not mentioned other than to say that “two of the existing shareholders in Christchurch Casinos Ltd wish to sell their aggregate 25% shareholding to the remaining shareholders.” However, on 15/2/95, the Press reported (“Winning hand with casino stake”, p.31) that “The Helicopter Line has sold its 13.5% stake in the Christchurch Casino Company for a 100% gain.” The gain was “in excess of $3 million”. “The stake was held through South Island Tourist Casinos – which had a 20.5% stake in the casino – and in which the Helicopter Line had a 63.4% stake. The Helicopter Line chairman, Murray Valentine, said last night that it had simply ‘got an offer’ for the stake from the other shareholders in the Christchurch Casino and had accepted it.” Quite a different story to that reported to the OIC. The only two shareholdings that add to the 25% identified by the OIC are those of South Island Tourist Casinos (20.5%) and Trojan Holdings (4.5%). At the price reported by the OIC, Helicopter Line’s profit would have been $3,513,031, assuming it bought its shares at par ($2,972,585). Premier Hotels (Christchurch) Ltd is 55% owned by Daikyo Inc of Japan, 15% by Southern Pacific Hotel Corporation of Australia, and 10% by each of DB Group Ltd (Singapore), Fletcher Resorts Ltd, and the Prudential Life Assurance Company of Australia and New Zealand Ltd. It operates the neighbouring Park Royal Hotel Christchurch and “is contracted to provide food and beverage services to the Casino and wishes to protect its existing investment in the casino venture.” Before the change in shareholding, the owners of the casino company were Skyline Enterprises (23%), Aspinall New Zealand Ltd (23%), Premier Hotels (Christchurch) Ltd (23%), Southern Equities (6%), Trojan Holdings (4.5%) and South Island Tourist Casinos (20.5%). Southern Equities is owned by Mr Louis Crimp, an Invercargill builder. The shareholders of Trojan Holdings, which runs the Milford Track Walk, include former Queenstown mayor, Mr John Davies. (See the analysis of June 1993 OIC decisions for further details.) Aspinall (New Zealand) Ltd, the holder of the operator’s licence for the casino was in the news in January after being ordered by the Employment Court to reinstate its former casino manager, Christopher Gore-Booth. He was dismissed by the casino in May 1994 and reinstated by the Court in July. In October the general manager of the casino, Arthur Pitcher, transferred Gore-Booth to Aspinall (New Zealand) Ltd (of which Pitcher was also chief executive), then immediately suspended him. Judge Brian Palmer dismissed an application by the casino to have the original order reversed and ordered Gore-Booth’s immediate reinstatement in his original position saying he had been treated unfairly and put in an embarrassing situation. Further hearings are pending. Asia Pacific Breweries Ltd of Singapore increases shareholding in DB Asia Pacific Breweries Ltd the Singapore based company which already owns approximately 56% of DB Group Ltd has been given retrospective consent to acquire a further 0.9% for $2,313,405, and consent to stand in the market to raise its holding to 65%. (On 23/2/95, Asia Pacific announced it had increased its shareholding from 56.12% to 58.13%, buying both ordinary shares and convertible notes: Press, “DB stake lifted”, 24/02/95, p.15.) Asia Pacific also has consent to convert its 73,326,653 convertible notes into shares when they mature on 30 June, 1996. It holds its shareholding in DB through its subsidiary Tarax Holdings Ltd and is itself jointly controlled (80%) by Heineken NV of the Netherlands and Fraser and Neave Ltd of Singapore. HK and Shanghai Bank mortgage over SEABIL and Trans Tasman Properties The Hong Kong and Shanghai Banking Corporation of Hong Kong (ultimately U.K. owned) has a $15 million loan secured by mortgage over shares and convertible notes in SEABIL (NZ) Ltd (45.9 million shares and 137.4 million mandatory convertible notes) and Trans Tasman Properties Ltd (60 $1 ordinary shares[!]). Clearly the loan is related to the controlling interest in Tasman Properties which the SEA group purchased last year (see November 1994 decisions). Trans Tasman was SEA’s holding company for the purchase. Trans Tasman is owned 60% by SEABIL (NZ) Holdings Ltd and 40% by SEABIL (NZ) Ltd. SEABIL (NZ) Ltd is 40% owned by the public, and 60% owned by SEABIL (NZ) Holdings Ltd. This in turn is owned 70% by SEA Holdings Ltd of Hong Kong and 30% by Brierley Investments Ltd. Potter Warburg gets approval to complete takeover of Buttle Wilson In a decision almost completely suppressed until released in July on appeal to the OIC, Potter Warburg Ltd of Australia gained approval to acquire the remaining 50% of Buttle Wilson Group Ltd that it doesn’t already own. The consideration is “to be advised following the settlement”. “The acquisition will enable Buttle Wilson to remain/become fully competitive in the New Zealand market against other Australian and New Zealand sharebroking firms, and other financial intermediaries witih resultant benefits.” Just whom the benefits are for, is not stated. However the integration met problems in May due to a prospective takeover of its ultimate parent. NZPA reported (Press, “Buttle Wilson restructures management”, 19/5/95, p.35): “The Auckland sharebroker Buttle Wilson has restructured its management, but faces an uncertain ownership structure pending the integration of SG Warburg investment banking into Swiss Bank Corporation. Buttle Wilson said it had suspended work on operational integration with its 50% shareholder, Potter Warburg, of Australia. Buttle Wilson is 50% owned by 23 of its executives, while the 50% major shareholder, Potter Warburg, is 50% owned by the London investment house SG Warburg. Swiss Bank Corporation recently announced an £860 million takeover bid for Warburg’s investment banking subsidiaries but not Mercury Asset Management, its 75% owned institutional fund management unit. The integration of Warburg’s investment banking operations into those of Swiss Bank Corporation will create a new global investment bank – SBC Warburg.” National Mutual buys 132 Vincent Street, Auckland for $14 million The National Mutual Life Association of Australasia Ltd of Australia has set up a subsidiary, 132 Vincent Street Ltd to buy for $14,000,000 the commercial property it owns at that address, which is in central Auckland. It “permits National Mutual to restructure its property portfolio with a view to allowing the public to invest indirectly (through a unit trust) in the property”. Tiong subsidiary, Neil Construction, buys further land in Albany Neil Construction Ltd, owned by the Tiong Family of Malaysia (owners of Ernslaw One and other companies in Aotearoa) is buying further land for residential subdivision in Albany, near Auckland. This time it is 8,094 square metres for $600,000. It brought several such blocks of farm land at Albany in 1994. Danne Mora and Fulton Hogan of the U.K. buy Howick land for subdivision In a decision almost completely suppressed initially, a joint venture between Danne Mora Holdings Ltd of Aotearoa and Fulton Hogan Ltd has gained approval to buy 31 hectares of land at Howick/East Tamaki, Auckland to develop into a residential subdivision. The price (even when the decision was released on appeal in October 1996) is “to be advised following completion of negotiations”. Fulton Hogan is 37.5% owned by Shell New Zealand Holding Company Ltd. The two companies also bought Howick/East Tamaki land for subdivision in November 1994 (buying Airlie Lodge with 64 hectares of land).
Finnish Hawkes Bay land owner restructures A Finnish owner of 863 hectares of land in Hawkes Bay, Mr F.W. Rosenlew, is “restructuring his forestry investments in New Zealand”. He is transferring the land, formerly owned by his company Rosaco (Jersey) Ltd, to another company owned by him, Ocasor Oy (“Ocasor” is “Rosaco” spelt backwards). In February and December 1992 the family bought (respectively) the 553 hectare Tirimoana Station for $546,780 for “farming and forestry development” and an adjacent 323 hectares of land in Tukituki Road, near Havelock North, Hawkes Bay for $518,796, again for forestry development.
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