Overseas investment decision for case 201020097 - Regenal Investments Pty Limited

An overseas investment in sensitive land, being the Applicant's acquisition of rights or interests in 73.0% of the Challenger Wine Trust which owns or controls:

• a freehold interest in 360.7920 hectares of land at 1370 Matapiro Rd, Crownthorpe, Hawkes Bay; and
• a freehold interest in 44.7681 hectares of land at 169 Gimblett Rd and 2145 SHW 50, Fernhill, Hawkes Bay; and
• a freehold interest in 200.5190 hectares of land at 1917 Redwood Pass Rd, Dashwood, Marlborough; and
• a freehold interest in 142.1080 hectares of land at Rarangi Vineyard, 53 Flaxmill Drive, Marshlands, Marlborough.

Challenger Wine Trust (CWT) owns 16 vineyards in Australia and 4 in New Zealand.

CWT's vineyards have significantly diminished in value as a result of a number of factors, including the global financial crisis, an ongoing oversupply of grapes, lower prices for wine grapes and the higher value of the Australian dollar. The fall in property values has contributed to an increase in CWT's gearing relative to borrowing covenants imposed by CWT's institutional lenders. The Applicant will stabilise this position by the Applicant's purchase of the 73% interest resulting in CWT being owned by two significant institutions being the applicant and LANV Pty Limited, a wholly owned subsidiary of Challenger Life Limited of Australia, rather than numerous and less financially resourced members of the public.

The overseas investment transaction has satisfied the criteria in section 16 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(a)(i) – Creation/Retention of jobs
17(2)(a)(iii) – Increased export receipts
17(2)(a)(iv) – Added market competition/productivity

Overseas Investment Regulations 2005
28(a) – Consequential Benefits
28(c) – Affect image, trade or international relations