Buying Up Bus Companies
This month’s one Decision is chosen to highlight the increasing foreign ownership of New Zealand public transport companies. To quote the OIO: “ICG Kinetic Trust – Australia (approximately 82.45%) United States of America (11.14 %) South Korea (3.48%) Canada (2.62 %) Switzerland (0.31%)” is the buyer. The seller is “OPSEU Pension Plan Trust Fund, Kinetic TCo Pty Limited (“the Target”) and certain shareholders of the Target – Canada (94.65%) Australia (5.35%)”.
“The Applicant is acquiring up to 49.9% of the shares in the Target. The Target’s subsidiary company acquired Go Bus in August 2020 after receiving OIO consent. Go Bus provides bus and coach transport services in 29 locations around New Zealand. The Target provides public transport services in Victoria, Queensland, New South Wales, Tasmania, South Australia, Northern Territory and New Zealand, including operating SkyBus and Go Bus services. The Target will continue to be managed day-to-day by its existing management team. The Applicant has satisfied the investor test criterion. The Minister of Finance has determined that the Investment is not contrary to New Zealand’s national interest”.
In her write up of the June 2020 OIO Decisions, Linda Hill recorded that the OIO approved Go Bus being sold to Kinetic. “The vendor is Go Bus Ltd (Ngāi Tahu Holdings Corp., NZ 66.7%; Te Whakakitenga o Waikato Inc., NZ 33.3%). Price withheld” (as it also is for the August 2021 further sale). “Kinetic is a Melbourne-based public transport company, known as AATS Group prior to August 2019. It is majority owned by one of Canada’s largest pension funds, OPTrust. See Wikipedia for Kinetic’s history and 13 subsidiary bus companies in Australia and NZ”.
“Go Bus was NZ’s largest bus operator, with key Government contracts to operate urban services in Auckland, Hamilton and Christchurch, and is the largest provider of school bus services, as well as owning Johnston’s Coaches. Kinetic’s Website says its new fleet of electric buses for Auckland Transport will connect growth suburbs with Auckland Airport. In Greater Christchurch, it will operate a further 25 new electric buses for Environment Canterbury (ECan)”.
So, New Zealand’s largest bus operator was sold from one foreign owner to another, one year later. This sale was not a one off. Ritchies runs public bus services throughout NZ. Its Website boasts “100% New Zealand Owned And Operated”. No more. Also in August 2021, it was sold to private equity behemoth KKR (Kohlberg Kravis Roberts), a giant investment company in the United States.
So, when you buy a ticket on a Ritchies bus, that will join a global river of money flowing into the accounts of KKR’s shareholders: the world’s biggest banks, investment funds and rich individuals. KKR makes its money by re-engineering companies for profit, and selling them off. KKR is one of the world’s biggest private equity funds. See Linda Hill’s “Private Equity Funds: The Swirling Billions Of The 1% Reach NZ” in Watchdog 154 (August 2020).
The full August 2021 Decisions are here:
Targa Capital Limited; Fletcher Concrete and Infrastructure Limited (x2); Metlifecare Limited; Ingka Investments Forest Assets NZ Limited and Ingka Investments Management NZ Limited; Fairfield TIR New Zealand Limited; KH Aggregator LP; Juken New Zealand Limited; Remutaka Forests Limited; IGC Kinetic Trust; SG Fleet New Zealand Limited and LeasePlan New Zealand Limited; NZ Logistics Holdings Limited; Grand Equity Investment New Zealand Limited; NZGT (UDC) Trustee Limited and UDC Finance Limited;