NEW ZEALAND: McDonald's paid $15 million for rival outlets

By Steve EVANS

The Dominion; 15th May 1997

McDonald's restaurant chain paid Progressive Enterprises $15 million for 17 Georgie Pie restaurants, the latest Overseas Investment Commission report says.

Progressive sold the restaurants to McDonald's last year after persistent losses from the home-grown chain. Georgie Pie had a book value of $40 million.

Progressive has since repurchased franchises of some of the remaining restaurants and closed others.

The commission report also shows US Office Products paid $63.4 million to buy the Blue Star group of companies early last year.

This is information had been confidential previously.

There were 140 consents for new overseas investment in the six months to December, down slightly from 145 in the first half of the year.

The consents involved $2.8 billion, also a slight fall from the first half's $3 billion.

Transfers of ownership between overseas parties or involving no ultimate beneficial ownership change were worth $700 million, up slightly from $600 million in the first half.

Consents are required if investments total 25 per cent or more or are for more than $10 million, and for land that is more than five hectares or that is "sensitive" land.

Many overseas investments fall outside these criteria, but the commission believes consents represent the bulk of overseas investment by value.

During the six months one investment proposal - by the American Richard D Collison Revocable Trust to acquire 14 hectares of land in Nelson-Marlborough for "lifestyle purposes" - was declined.

The refusal was the first since 1990, though there has since been a second refusal - again for a lifestyle block.

The 1990 refusal was for an application relating to a shopping mall in Auckland.

Malaysian buyers snapped up the most freehold land (36,889 hectares), followed by Americans (8730 hectares) and Australians (3123 hectares). Sales of 51,913 hectares were approved.

China's Citec headed leasehold approvals as part of the consortium led by Fletcher Challenge to buy Forestry Corporation's assets.

The sale included 187,543 hectares of leasehold land.

The predominant use of freehold and leasehold land was for forestry - 234,196 hectares or 97 per cent.

The commission's income for the period was $312,908 while expenditure was $332,564, figures bound to outrage opponents of foreign investment.

Commission secretary Stephen Dawe said the commission was meant to recover its costs but expenditure could not always be foreseen.

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