Rangatira's new net goes fishing

Last updated 05:00 28/12/2012

Relevant offers

National business

Fonterra axes 30 jobs from Hamilton Canpac plant The Panama Papers New Zealand link revealed Mike McRoberts commits to stay with MediaWorks Panama Papers source breaks silence, denies being a spy Bundaberg recalls ginger beer due to popping caps Panama Papers whistleblower calls out John Key over silence on 'fraud Mecca' Mike O'Donnell: Online media is a strange race where the winner loses the prize Rod Oram: Painting over the housing cracks Wellington City Council's Marshall Court flats receives another top award Former Air NZ engineer arrested in United States

Wellington investment company Rangatira says it has $70 million for new investments after the sale of its $50 million half share in oil and gas services company Contract Resources.

Chief executive Ian Frame said Rangatira was looking for "junior versions" of bacon business Hellers and Contract Resources, which it has just sold conditionally to listed investment company Hellaby Holdings.

Each had grown fourfold since Rangatira first invested in them about a decade ago and now Rangatira wanted new unlisted investments of up to $20m each, in line with its policy of having no more than 10 per cent of its portfolio in one business, said Frame. It was already looking to spend $20m before the deal.

"We have been looking for medium-sized New Zealand based businesses with good growth potential and strong management [and] we are open-minded about what sectors," said Frame.

Hellaby, owner of Hannahs and Number One Shoes, announced yesterday it would spend $73 million on an 85 per cent stake in the New Zealand-founded oil and gas services company.

The other 15 per cent of Contract Resources will stay with chief executive Andrew Wells and senior managers Trevor Penny and Gray Gardner in equal shares.

Including $30m of new debt to help finance expansion, the deal puts a $116m enterprise value on Contract Resources.

Hellaby will fund the equity component of the purchase using existing banking facilities, and the deal is scheduled to settle on March 31 next year, subject to finance and other conditions.

It came about after an 18-month hunt by Hellaby for a business to boost its earnings outside New Zealand, adding a fifth plank to Hellaby's existing divisions of industrial equipment, automotive, packaging and shoe retail.

Shares in Hellaby were up 4.3 per cent at 3pm yesterday to trade at $3.18, up from $2.40 a year ago.

Frame said Rangatira had planned to keep a slice of the New Zealand-founded business but had agreed to sell its whole stake towards the end of negotiations.

"Hellabys were keen to have a controlling interest and we realised it was best to get right out."

Rangatira's remaining portfolio includes Auckland Packaging Company, Hellers, Rotorua's Polynesian Spa and three-quarters of Auckland theme park Rainbow's End. It has received acceptances to buy at least another 5 per cent of Rainbow's End and the offer remains open until February.

Rangatira is 51 per cent owned by the JR McKenzie Trust, with other community and charity groups holding another 15 per cent. The balance is in the hands of about 200 private shareholders.

Ad Feedback

The sale of more than a third of Rangatira's unlisted portfolio should boost the net asset value of its shares, traded on the Unlisted share platform, above $10 come the end of March, Rangatira chairman Murray Gough said, up from $9.26 at the end of September.

Wells said the purchase by Hellaby would allow Contract Resources to train staff and buy equipment in the Middle East, its fastest-growing region for sales.

"It allows some of the shareholders and investors who wanted to get out and who weren't adding much to realise gains from the business while keeping it in New Zealand hands. We can move forward with better financial backing then we had previously," said Wells.

Contract Resources had opened offices Oman, Abu Dhabi and Qatar and was looking at reaching into Egypt, Kuwait and Saudi Arabia, he said.

About 90 per cent of sales are to clients overseas including about 65 per cent to the oil, gas and mining industries in Australia.

- The Dominion Post

Special offers

Featured Promotions

Sponsored Content