The Great Tainui Sell-off Begins

Tainui Group Holdings are up to their eyeballs in debt and they need more cash in a hurry but wouldn’t it have been better with an extra 23 mil. in the bank…

Hamilton hotels share sell-off

Maori business heavyweight Waikato-Tainui is believed to be considering selling a large slice of its Hamilton hotel interests.

Going… going… gone…

The Waikato Times understands the tribe’s commercial arm will retain a minority stake in Hamilton Riverview Hotels Limited, owner of the Novotel Tainui Hamilton and the Ibis Hamilton Tainui, after first buying out the current minor shareholder, international hotel management company Accor.

Tainui Group Holdings and Hamilton City Council are this week expected to confirm plans to then jointly offer a majority stake in the hotels, the result of extended informal talks between the three shareholders.

Hamilton ratepayers and TGH between them own almost 83 per cent of the hotels.

The city has been signalling its wish to sell out of the hotels for some time but Waikato corporate juggernaut TGH’s decision was not expected.

Earlier this year the council’s 41 per cent shareholding was independently valued at $14m.

The organisations are thought to believe that offering a majority stake in their well-performed hotels business will help draw a premium price.

TGH chief executive Mike Pohio declined to comment on the matter.

The tribe’s hotel interests also include 70 per cent of the $65m Novotel Auckland Airport through its subsidiary Tainui Development Limited.

The council was briefed behind closed doors on the progress of lengthy confidential shareholder talks over the future of the city’s stake in the Ibis and Novotel hotels late last week.

Before that briefing, council performance general manager Blair Bowcott told the Times he would be presenting the council with a “recommended path forward for progressing the sale of [the city’s hotels] shareholding”.

He indicated that the briefing would not include consideration of any offers to buy, and that the process would be a multiple- stage process.

The pre-emptive rights process in the hotel company constitution requires shareholders to first offer those shares to the other shareholders.

When approached after the briefing Mr Bowcott would say only that the matter remained confidential, so he was restricted in his ability to comment.

However, he expected that “in the next week” the council would be able to make a public statement and update on the sale of its shareholding.

He agreed a larger offering would help draw the best price for the city’s shares.

Once any hotels shareholder initiates formal sale discussions with other shareholders a time limit is triggered under the company constitution.

Mr Bowcott has previously confirmed the city’s treasury policy is to repay debt with proceeds from asset sales, and spending it elsewhere – such as on a one-off rates reduction or investing in other assets – would require formal public consultation.
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The company has performed well in recent years, a year ago reporting high occupancy and a $500,000 dividend while paying down $3.5m on its term loans.

The city announced its initial investment in the four-star Novotel hotel in 1996 after 18 months of secret talks with Waikato-Tainui. It provided $2m worth of land and $4m, the tribe $6m and Accor Asia Pacific $5m in cash and loans.

The hotel had a patchy first operating year after opening in 1999, and Waikato-Tainui and the city were forced to bail it out with a further $1m in 2000.

By 2005, when the company announced plans for the $20m economy Ibis hotel, the city’s stake was worth $10m and no injection was needed as the company funded the debt and operating cost.

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12 Comments (+add yours?)

  1. Pango Winterburn
    Aug 22, 2012 @ 05:11:17

    Is this blog based on facts, or is this just a shit stir-ring site????—Pango Winterburn

    Reply

  2. Chris Webster
    Aug 22, 2012 @ 06:06:17

    What is the new expensive chair Sir Henry doing? How much is he & his other directors being paid to look for cash? First TGH must bolster its bank accounts. And whether the 4% difference (max board policy borrowing overdraft is 30%) & according to TGH annual report it has been lowered to 26% will allow them to go cap in hand to the 3 banks that have charges on ALL our assets.

    TGH still owe lots of pinga’s. And what are Hemi Rau & Paki Rawiri doing at the table? Pushing for the sales or will TGH continue to sell down the 470 parcels of land that came with the 1995 settlement. In fact how much of the 470 parcels of land remain & at what value? And when they do sell these settlement properties where happens to the money? Is it absorbed or is it without justification – as what has happened recently where $74,000-odd to was ‘loaned’ to WRLT & TAA & their mates to play with & to give to citizen Paki for his personal spending?

    And why does TGH not ‘call in’ – you know – the ‘payable on demand’ condition it has with its internal entities – such as TDL, WRLT – TAA none of which generate or create money (just bloody chaos) – they just love to spend it.

    No wonder Greg Miller is anxious to ‘take control’ and for TAA to ‘do what it wants’. And why does MIke Pohio (your favorite CEO) bristle at the criticisms from two blogs – gee now what two blogs are those?

    Reply

  3. Ngawai Robinson
    Aug 23, 2012 @ 02:57:42

    Talking about asset sales (Waikato Times 22/08/2012) by the way Mr Rau and Mr Paki what strategies are you 2 promoting as an alternative option to asset sales? A few possible ways to increase savings is to reduce services in areas which have
    a low impact and financial performance. And meeting all operational budgets and savings is needed to see where improvements/cuts can be made.

    I tend to agree with EB and Chris Webster that the real victims here will continue to be the 66,000 tribal shareholders, mostly informed via media and denied an opportunity to speak to matters of importance [Protect your rights over waterways – [King Tuheitia RNZ 22/08/2012 et al, Te Hookioi v. (41) 2012].

    For instance; did anyone else catch Te Kaea news the main day of koroneihana? Two guys were interviewed 1 from Maniapoto and the other guy’s a TAA member. It’s interesting to observe how people prioritise the message they want to convey to the nation because I was none the wiser after their sound-bites. From their pearls of wisdom you’re left with the impression they’re stating; fiction, facts, or farming – sounded more like foot in mouth disease to me. Tainui might need to promote new PR people!

    Reply

  4. Ngawai Robinson
    Aug 28, 2012 @ 08:16:06

    Multiple “Bottom Lines”
    Erakas’ Blog and WaikatoPolitX are Tainui’s most popular political sites accessed by over 99,000.00 readers and bloggers. This is the “voice” of the fantail.

    New comments by a few to EB suggest aggressive intolerance is more preferable to facts. Do your souls a favour whanau and become informed you might be surprised by what you learn!

    Who is growing wealthy on the back of our communal resource (Waikato Tainui’s Raupatu Settlement)? Who is excluded? Where are the compensatory resources for the 33 dispossessed hapu who had vast tracks of land stolen? Who lost out as a result and denied multi-billion dollar business opportunities? Waikato Tainui was once destined to secure an economic base to produce NZs farming exports; dairying exports; produce exports? A new form of internal raupatu is being perpetuated by TAA to control all of our marae – you all need to sort this BS out insist your TKI representatives speak up and stand up for you! And who remains in poverty, unemployment, bottom of the heap health stats, and housing rentals today?

    The colonial mould means it is, and it always has been, about power resources, and land. Just like the national debate on iwi/hapu proprietary water rights is a moot point.

    There’s no denying that we’ve all been witness to all the talk about a game plan and speeches of accomplishments, but when it’s all said and done, it’s all the same thing who “controls the money… who gets it and who doesn’t”…

    The greedy behaviour of a few cliques during a depressed financial economy may well be the final straw that bring Waikato Tainui to our impoverished knees [Business Day 24/08/2012 – ‘NOTHING TO HIDE’: KiwiRail chief executive Jim Quinn].

    Multiple “Solutions”
    TGH and TAA are viewed as being in direct opposition to our elected parliament. Why I believe that Mr Wetere and Mr Spencer are needed as consultants to assist TKI. A structured framework of tools is needed our representatives can make smart business decisions moving forward. These guys don’t grow on trees their skillset is unique to Maoridom!

    A red flag on the inland hub plan for the interim is necessary now that KiwiRails business commitments look likely to take a dive with the loss of between 170-220 jobs [Business Day 24/08/2012 – ‘NOTHING TO HIDE’: KiwiRail chief executive Jim Quinn].

    That must be worrying for the directors of TGH as they invested between $300m and $350m developing the 29ha Base retail park and “this is at least 10 times that” the start date for this project is 2018 some six years away [Business Day –Tainui releases business plans for inland hub 13/12/2010].

    Tainui Group Holdings CEO “said the Ruakura project was different from other companies’ freight hub plans because it was ”master planned” for 50 to 100 years into the future. It would not be developed in a fragmented way by different parties” [Business Day 08/12/2011 – Fonterra eyes Hamilton for $100m hub].

    The CEO of TGH might want to revamp the master plan in light of recent developments. Here’s middle ground suggestion – how about a multi-cultural partnership business plan? Get other interested iwi/public/ private investors on board rather than fund the entire project ourselves! ‘Only those who dare to fail greatly can ever achieve greatly’. So said Robert F. Kennedy on becoming President of America.

    Reply

  5. Frank
    Aug 29, 2012 @ 18:18:40

    Ngawai Robinson get a life. I googled you and your not even qualified to be giving advice. Go to your marae and get them to put you on TKI then we will see if you can walk your talk. Saviour wannabe.

    Reply

    • Rachel Hona
      Apr 23, 2014 @ 19:31:28

      Ngawai Robinson speaks a element of truth about how some people in Hamilton percei e the elitist propoganda that is thrown about within this Iwi.Its hard born and breed in this town to see so many people still in poverty and struggling with everyday realities to be impovished while others are living the luxury off everyones else back its another underclass
      forming and while the business elite politics and commercial arm are performing the respect is deforming? Why is it that so many are not advancing and jumping for joy? Because they have gained nothing but a look into a name with title and forgotten about the real people.What is advancement if you are only giving your people self serving agenders and mandates governed by the elitist and forgetting it was Everybody’s money you are playing with?By that I mean the people.Are getting left behind? Why?
      Natural born killer GREED

      Reply

    • Rachel Hona
      Apr 23, 2014 @ 20:53:29

      I thought these sites were for ALL to have there say Frank? I am glad theres still some people that know what’s going on? And bombing /Attacking ones right to free speech.I have to say Ngawai is a elitist in that she talks the talk equal to facts not equal to the wannabee syndrome your suggesting.? Shes informative fact giving and brings in a good view point for debate and discussion.

      Reply

  6. Ngawai Robinson
    Sep 04, 2012 @ 14:18:48

    LoL, clearly you’re afraid of entering a debate on facts. I’m not surprised. You sound like a sad stalker desparately trying to attract attention :-(.

    Reply

  7. Rachel Hona
    Apr 23, 2014 @ 20:19:08

    Ngawai Robinson speaks a element of truth about how some people in Waikato perceive the elitist propoganda that is thrown about within this Iwi.Its hard born and breed in Hamilton to see so many people still in poverty
    and struggling with everyday realities to be impovished while others are living the luxury off everyones else back its another underclass
    forming and while the business elite politics and
    commercial arm are performing the respect is
    Deforming Why is it that so many are not advancing and lacking a say in there futures? It should not be reserved for the honour students and over glorified business experience abroad to have complete authority over these matters.Most people have gained nothing but a look into
    a name with title and forgotten about the real people.What is advancement if you are only giving your people self serving agenders and mandates governed by the elitist and forgetting it was Everybody’s money you are playing with?By that I mean the people.Are getting left behind? Why?
    Natural born killer GREED..

    Reply

  8. Ngawai Robinson
    Apr 25, 2014 @ 12:09:50

    Hi Rachel,

    In the arithmetic of whanaungatanga, one plus one equals everything, and two minus one equals nothing. I guess we’re all looking at how we relate to those around us and how we might make our direct personal relationships more effective and sincere and act on what is important to you. We live in serious times but I think it’s important wherever possible to re-engage with the things that make us happy. To recognise those moments in time when you can dip into those simple spaces and be still, in a place where you can be free.

    The struggle to be free can be at cross-purposes with the established systems of social cultural political and economic power and control. I hope you experience first hand the true beauty and grace of the silver lining!

    Naku noa ano

    Reply

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