The week in review

Friday 6th July 2001

COMPANIES

Sky City received interim approval from the Casino Control Authority for a $37 million convention centre. Final go- ahead is subject to finalisation of appropriate conditions and board approval. The new development will provide 2500sq m of conference space, including a 1450sq m banquet room capable of seating 1000 people, and will add 230 gaming machines and 12 gaming tables.

A draft report from the Commerce Commission indicated it would recommend price controls be imposed on airfield activities at Auckland International Airport. The view may be changed in its final report once it has received submissions from interested parties and their experts. Final recommendations will be made to the minister on November 2.

Bank of New Zealand owner National Australia Bank announced a $600 million writedown provision of the balance sheet value of US mortgage servicing rights held by subsidiary HomeSide Lending. As a result the carry value of HomeSide's net asset in the NAB's balance sheet has been reduced from $US1.3 billion to $US1 billion.

Transram Group, a 50/50 joint venture between Panama-based WeCU and NZ-registered Genesis International Charitable Trust, spent from $10-$12 million buying just over 50% of Wilson Neill shares. The raid on Wilson Neill, which trades on the secondary exchange, took place before the new Takeovers Code came into force on Sunday.

Lion Nathan broke off discussions with two of China's largest brewers after looking at options to participate in the consolidation of the Chinese beer market. Lion chief executive Gordon Cairns said the company had an open mind about selling its Chinese business, which lost $16.4 million before interest and tax for the six months to March 31, but would not opt for a fire sale.

The Securities Commission decided to grant a class exemption for offers of securities made in takeovers. Issuers who have been quoted on the NZSE for at least 12 months will be able to register an abbreviated prospectus while other issuers will receive a more limited exemption. All issuers will still be required to provide an investment statement but its contents will be tailored to reflect the different circumstances of a takeover. See www.sec-com.govt.nz for more information.

Fletcher Challenge Forests announced two accounting policy changes. Forest valuations will now be accounted for on a market valuation basis using discounted future cashflows as the basis for current valuation instead of historical cost basis. The functional currency of the business will also be changed from the US dollar to the New dollar with effect from June 30.

Natural Gas Corporation agreed to sell the South Island electricity customer base of its retail business, On Energy, to Meridian Energy. The sale was part of a range of initiatives by NGC to reduce the effects of high wholesale electricity prices, which had reached unprecedented levels during June.

An arbitrator has decided NGC must pay $1.68 a share to Infratil after the infrastructure investor invoked the buyback of 26.5 million shares following NGC's purchase of a majority stake in TransAlta. The decision means NGC will have to pay another $10.1 million to Infratil on top of the $34.4 million already paid.

Caltex NZ has bought the Challenge service station network from Rubicon for about $50 million. Caltex has undertaken to divest certain assets to satisfy the Commerce Commission and will maintain the Challenge brand. Caltex will also honour all existing supply agreements with independent Challenge service stations and provide job continuity to all Challenge employees. There will be some changes to elements of the retail networks over time.

Origin Pacific and Qantas Airways signed a codeshare agreement that will see Origin increase from 225 sectors a week to 352, adding over 6000 seats a week. Qantas will fly Auckland-Wellington and Auckland-Christchurch and Origin will provide links from Christchurch to Wellington, Queenstown and Rotorua.

Westfield opened its new Westfield Shoppingtown WestCity in Waitakere City. The company spent $80 million and 16 months upgrading the mall to a total of 28,500sq m, 1500 car parks and 130 specialty shops and large retailers, including Farmers, Big Fresh, Unichem and Whitcoulls. The new mall is the first in New Zealand to use Westfield's entertainment and lifestyle precinct design, which offers a mix of diverse shopping, cafes and restaurants.

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