Overseas investment decision for case 200810040 - Toll Group (NZ) Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment.

The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background to the Investment:
Toll Group Holdings Limited is the ultimate parent entity for the Toll Group of companies and is listed on the Australian Stock Exchange (Toll Group). Toll Group is Australia's leading supplier of totally integrated logistics solutions. Toll operates a multi-modal (road, air, rail and sea) network in Australia and also has logistics operations in Asia and New Zealand.

Toll Group's New Zealand operations are carried-out by the Applicant (through its subsidiaries). The Applicant is wholly-owned by Toll Group. Within New Zealand the Applicant provides integrated road, rail and sea services in all major areas of the transport and logistics sector. Its business units include Toll Rail, Toll Tranz Link, The Interislander, Tranz Metro and Tranz Scenic. Toll Carriers Limited is a special-purpose vehicle incorporated for the proposed investment.

Outline of the Investment:
Toll Carriers Limited has entered a sale and purchase agreement for the acquisition of the business and business assets of: United Carriers Limited, Kaitaia Transport Limited, United Logging Limited, and United Management Services Limited (together the Vendor Companies). Included in the Vendor Companies' assets is a ground lease dated 19 March 2007 for a period of 35 years. United Carriers Limited currently holds the lease and will assign it to Toll Carriers Limited. Toll Group NZ is guarantor for the acquisition.

Rationale for the Investment:
The Vendor Companies operate a fleet of road freight transport vehicles from hubs in Whangarei and Auckland with depots at Kaitaia, Kerikeri, Kaikohe, Dargaville, and Waipu. The land subject to the leasehold interest is currently used by the Vendor Companies as a freight transport facility. The Applicant intends to continue to use the land as a freight transport facility and to improve overall efficiency and productivity in transport within the Northland region. A key driver for the Applicant's acquisition is to convert the Vendor Companies' current mode of freight transport in the Northland region from road to rail.

The proposed investment will or is likely to benefit New Zealand (or any part of it or group of New Zealanders) having regard to the following factors:

Overseas Investment Act 2005:
s17(2)(a)(iv) -Enhanced domestic services.

Overseas Investment Regulations 2005
r28(b) - Key person in a key industry from a country with which New Zealand would benefit from improved relations.
r28(e) - Previous investments of benefit to New Zealand.
r28(f) - Give effect to Government policy.