Japanese bid nets Sealord

By PAULA OLIVER

Months of negotiation and political posturing ended yesterday when the Treaty of Waitangi Fisheries Commission revealed that it would take on a Japanese partner to buy half of local fishing company Sealord.

The $207 million deal comes ten months after Brierley Investments decided to sell its half share in the country's largest deepwater fishing company, and four months after the Government stepped in to stop a sale to a foreign owner.

The Government then ruled that an overseas party could not own more than a quarter of the fishing company.

Under the deal's terms, Japanese giant Nissui will take on a quarter of Sealord in a joint venture with the Fisheries Commission.

But in a careful twist, all Sealord's fishing quota - 23 per cent of the country's total quota - will remain in the commission's hands.

BIL will receive $181 million in cash, and the joint venture will take on $26 million of debt.

The buyout still needs Overseas Investment Commission approval, but both parties yesterday appeared confident their quota arrangement would avoid any embarrassing intervention.

"We have yet to encounter anyone who has formed the view that this is a bad deal," Fisheries Commission chairman Shane Jones said.

"We don't foresee many difficulties at all with the OIC delivering its consent."

Nissui was one of many parties, local and overseas, which were interested in buying half of Sealord.

A local consortium headed by Sanford went as far as winning Commerce Commission approval, but it is understood the group would not match Nissui's offer.

Sanford managing director Eric Barratt would not comment yesterday.

Nissui was chosen to partner the commission because it brought opportunities for growth in overseas markets, smart technology and a healthy interest in New Zealand, Mr Jones said.

As many as 700 jobs could be created by the venture, because Nissui was keen to pursue value-added strategies that would require expansion.

Nissui, which has interests in food processing and pharmaceuticals as well as fishing, has a turnover of about $10 billion a year.

It held an interest in Sealord from 1973 to 1990, and a company spokesman said yesterday that it was embarrassed that it had decided to sell out of Sealord in 1990.

Nissui was disappointed earlier in the year when the Government rebuffed its attempts to buy all of the 50 per cent stake.

But it had persisted because it was attracted to Sealord's management style.

Mr Jones, who had made the deal a priority since being appointed Fisheries Commission chairman in August, described completion of the protracted negotiations as an extreme relief.

He said the commission would lease its quota to Sealord, but would not reveal the terms of the arrangement.

It was never a practical option for the commission to take on the entire half share, he said, because its risk needed to be shared.

"We wouldn't want to be over-exposing Te Ohu Kai Moana [the commission] in any deal of this magnitude."

The commission had not borrowed any cash from Nissui to pay for its part of the deal, Mr Jones said, in response to a statement from New Zealand First leader Winston Peters.

Nor had it dipped into cash reserves set aside for allocation.

Mr Peters described the deal as a "tragedy," partly because a local consortium had been rejected.

Fisheries Minister Pete Hodgson would not comment because, he said, he may have to play a role in the Overseas Investment Commission's decision on the deal.