Bank of China contributes $358.58 million NZD to a $1.07574 billion NZD syndicated loan to Beijing Capital Group for the acquisition of Transpacific New Zealand

Project narrative

On February 27, 2014, financial close was reached on a deal in which a three-bank syndicate — the Bank of China (BOC), HSBC Bank Plc, and Australia and New Zealand Banking Group (ANZ) — entered into a $1.07574 billion NZD syndicated loan agreement with Beijing Capital Group Co., Ltd. (BCG) — a Chinese state-owned enterprise owned by Beijing Municipality — to finance its acquisition of Transpacific New Zealand, a New Zealand-based waste management firm. This loan carried a maturity period of one year and a final maturity date of February 27, 2015. Each lender contributed $358.58 million NZD ($300 million USD) to the loan syndicate. A wholly owned subsidiary of BCG entered into a purchase agreement, announced on March 3, 2014, with Australia's Transpacific Industries Group to acquire all 100% of the shares in Transpacific New Zealand (via its holding company Transpacific Industries Group Finance (NZ) Limited) for $950 million NZD ($796 million USD; $880 million AUD; ~RMB 5 billion). A key motivation for BCG's acquisition was to acquire technology to support curbing pollution in Beijing and the rest of China; Transpacific New Zealand, New Zealand's biggest waste management firm, was known for its environmentally friendly landfill methods, odor management, and hazardous waste handling, was seen as a key to improving waste management in China, especially amidst new environmental regulations. The acquisition was reportedly the largest in the history of solid waste treatment in New Zealand, the largest overseas acquisition by a Chinese company in environmental protection, and BCG's first overseas merger and acquisition project. The acquisition included the following rights and interests in land held by Transpacific New Zealand: a freehold interest in approximately 79.2035 hectares of land at 125 & 127 Old Brighton Road, Dunedin; a leasehold interest in approximately 2.2840 hectares of land at Dairy Flat, Auckland; a freehold interest in approximately 182.7373 hectares of land at Dairy Flat, Auckland; a freehold interest in approximately 1.1877 hectares of land at 57-59 Port Road, Lower Hutt; a freehold interest in approximately 1.3207 hectares of land at 25 Inlet Road, Papakura; a leasehold interest in approximately 1.5390 hectares of land at 8 Daphne St, Te Awamutu; a freehold interest in approximately 0.6405 hectares of land at 27 Seaview Road, Wellington; a leasehold interest in approximately 1.5357 hectares of land at Edgar Street, Hamilton; a freehold interest in approximately 123.2446 hectares of land at Bruce Road, Turakina; a freehold interest in approximately 1461.0646 hectares of land at Mt Cass Road, Waipara, North Canterbury; a put option interest in approximately 55.9429 hectares of land at Horseshoe Bush Rd, Auckland; a leasehold interest in approximately 12 hectares of land at 600 Island Road, Puketutu Island, Mangere, Auckland; a leasehold interest in approximately 0.1046 hectares of land at 53 Port Road, Lower Hutt; a leasehold interest in approximately 0.6076 hectares of land at 108 & 110 Ostend Road, Waiheke Island, Auckland; and a leasehold interest in approximately 7.1067 hectaresof land at 40 Metro Place, Bromley, Christchurch; and. The acquisition was expected to be completed by June 2014 pending regulatory approval from the New Zealand Overseas Investment Office. The Overseas Investment Office (OIO) issued approval on June 9, 2014. On July 21, 2014, Beijing Capital Group NZ Investment Holding Limited acquired all shares in Transpacific New Zealand. Transpacific New Zealand was renamed Beijing Capital Waste Management NZ Limited upon completion of the acquisition. New Zealand First party leader Winston Peters criticized the acquisition saying that the OIO was failing in its role as a watchdog for New Zealand by approving the acquisition without sufficient scrutiny; he also lamented that any New Zealand bid for the company was hard pressed, due to significantly higher interest rates than those in China. Peters also questioned BCG's ability to implement sustainable waste management that was key to New Zealand's Pure NZ branding amidst failings by other Chinese companies in other sectors in New Zealand. Additionally, Murray Horton, a spokesman for the Campaign Against Foreign Control of Aotearoa, called the sale of Transpacific an instance of how big foreign companies overpay to come to New Zealand and then to "milk it for all it's worth". On April 1, 2022, BCG announced the sale of Waste Management NZ Limited (the renamed Beijing Capital Waste Management NZ Limited) to Igneo Infrastructure Partners (Igneo), to be completed in late 2022.