$1.3b retirement villages deal approved

A huge deal involving $1.3 billion of retirement village assets has been approved by the state's foreign watchdog.

And a second retirement deal involving $195 million has also been cleared.

Australia's Retirement Villages NZ got clearance from the Overseas Investment Office to bolster its stake in NZX-listed Metlifecare after telling the Government authority that Metlifecare needed new capital injected.

Peter Hill from the investment office yesterday issued all the latest applications. The Metlifecare move is one of the largest overseas investment transactions to go before the office this year.

Metlifecare has raised $37.8 million via a renounceable rights issue to its shareholders.

Yesterday it traded at $1.51, a big drop on the annual high of $4.70 but better than the $1.30 it reached at one point in the past year.

Retirement Villages NZ, which holds an 82 per cent stake in Metlifecare, said it would take up all its rights.

If existing shareholders had not taken their stake in the issue, the Australian business said it would have wanted that too.

Metlifecare needs the money to cut its debt and develop the business. Last month, it confirmed the next phase of its new village at Takapuna.

The application listed four properties as falling under the Overseas Investment Act's classification of sensitive land and involved assets worth $1,307,863,000.

"Metlifecare owns and operates 17 retirement villages incorporating 10 care facilities and eight hospitals," the application said.

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Two other deals involving the sale of valuable New Zealand assets by Australia's Babcock & Brown have also been approved.

A $415 million deal was granted for Australia's QIC Private Capital to buy a half-share of Powerco Transmission and Independent Transmission Services from Babcock & Brown Infrastructure Networks (NZ). Land at Tairua and Gate Pa was listed as sensitive and part of this deal.

QIC, which wants the assets, said it was managing investments on behalf of Queensland superannuation schemes and the Queensland State Government.

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In another deal, Australia's Lend Lease Corp was given approval to buy $195 million of assets from Babcock & Brown Communities Group.

"The vendor is Australia's second largest listed retirement sector and aged-care owner and operator," the office said of Babcock which has 56 retirement villages and 29 aged-care facilities here and in Australia.

Lend Lease wants to be a leader in the sector and buying the assets would help achieve that goal, the office said.

The deal had to go before the foreign watchdog because it involved assets worth $100 million-plus and land classified as sensitive under the act. Land listed as part of that deal was 12.6ha at Knightsbridge Village in Auckland's Mairangi Bay and 14.3ha at the Peninsula Club, Whangaparaoa.

Contact Energy got approval to buy 877ha of land at Totara Downs, Onewhero in the Franklin district from Bramwell Farms of New Zealand and 186ha of land on Otuiti Rd at Pukekawa for $5.3 million from Kiwi owners.

Contact needs the land for its Hauauru ma raki wind farm project announced in October 2007.

Getting the land was a fundamental part of the project, Contact said, adding that the wind farm had the potential to generate up to 540MW of "clean renewable, climate-friendly electricity to power up to 200,000 homes."

VILLAGE PEOPLE

"Sensitive" Metlifecare land:

* 1.8ha at Edgewater Drive, Pakuranga.
* 17.9ha at Henley Way, Paraparaumu.
* 10.1ha at Green Bay in Auckland.
* 2.7ha at Mt Maunganui, Tauranga.