News } TBK Capital

Committees, Commitment and Uncertainty

A year ago this week I sent you the newsletter New Government - New Opportunities in which I said “there appears to be an acceptance from traditional National followers to the change” [in Government]. So how has economy and business fared since then?

A year ago this week I sent you the newsletter New Government - New Opportunities in which I said “there appears to be an acceptance from traditional National followers to the change” [in Government]. So how has economy and business fared since then?

Well in September according to Bloomberg “New Zealand’s economy grew at the fastest pace in two years in the second quarter [of the financial year], prompting markets to pare bets on an interest-rate cut. The currency rose to a three-week high.”

And from a global point of view, in October according to World Economic Outlook, “The steady expansion under way since mid-2016 continues, with global growth for 2018–19 projected to remain at its 2017 level. At the same time, however, the expansion has become less balanced and may have peaked in some major economies. Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded.”

The October Monthly Economic Review shows June annual average GDP growth is still strong at 2.7%, unemployment (4.5% and inflation (1.5%) down and the Official Cash Rate the same at 1.75%.

Uncertainty Remains
So according to onlookers, things are looking pretty good. I can’t help feeling though, while Jacinda Ardern steals the limelight in a personal way, I’m not sure what’s behind her in the Government, and what it’s actually doing.

In fact I’m not sure what Government decisions have been made and who’s making them. Even Winston Peters is quiet.  It feels like every time a question is raised a committee is formed.

Recent articles reflect this trend. They suggest business confidence remains weak but the recent confidence bounce means the wheels are not falling off.

Business Needs a Lead
Policy wise things didn’t start off too well with the knee jerk reaction like that of the ban on offshore Oil & Gas exploration and the policies that have been announced since then - I’m still not sure what these are - do not seem to have been well considered.

The Government’s May budget offered little assistance to SMEs and the uncertainty around any new capital gains tax has not been of any help.

The family home will certainly be exempt. But what about investment in residential houses and apartments which provide much sought after accommodation in the cities? And most disturbingly what about what about small businesses which provide employment?
There have been numerous articles about this, which have one thing in common – and that’s uncertainty.

In August the Prime Minister said she was “interested in the reality of what our economy is doing and how it’s performing”.
In September ANZ chief economist Sharon Zollner said “The growth signal coming out of the survey remains weak, certainly. But if the indicators continue to rebound, it will increase the odds that while the economy may have hit a pothole, the wheels are not falling off." And on Wednesday ANZ’s New Zealand Business Outlook seems to be aptly entitled “Feeling Flat

Also on Wednesday, ASB senior economist Mark Smith was reported as saying there were reasons to be cautious about the real world impact of low business confidence. He said "We are sceptical over the information content of this survey and believe weak sentiment is partly due to business unease about the change in policy direction rather than signaling a genuine growth slowdown.” My underline.

While there’s at least a website on investing here, this uncertainty is creating a political nightmare for the government and does not encourage investment.

Current and Impending Investment Opportunities
On Monday it’s only 8 weeks to Christmas Eve. So as we draw closer to the end of the “investment decision” calendar year, it’s probably an appropriate time to announce investment opportunities we have coming up, and review the Offers we have available.

Manuka and Macadamia Oil Plantation
We’ve previously offered investment in a Manuka Oil plantation on the East Cape of New Zealand. This Offer looks to be fully subscribed from an investor within the industry.

We are now in the process of preparing another Offer to immediately harvest a very large existing plantation of Manuka in Northland for the production of the Oil. There is already a contract in place for the sale of 1,925 Kgs of Oil at $750 per Kg for the next 12 months. Production is expected to expand to 5,000 Kgs in year 3. The plantation covers an area of 944 Ha and the intention is to set aside 50 Ha for a one million macadamia tree seedling program.

The intention is to immediately raise a loan of $250,000 to initiate the program, and early next year the business intends to raise $1 million capital to proceed with the harvesting of the Manuka, the extraction of the Oil, the planting of Macadamia seed stock, and registration of the entire station into the NZ Emissions Trading Scheme. Expressions of interest in providing this $250,000 loan and/or participating in the capital raise are welcome. Maybe loan with an option to convert to equity? Seems pretty attractive to me. Enquiries welcome.

Pacifica - World Premiere
Pacifica is a theatre musical set in Auckland and a mythical South Pacific island. The World Premiere is being held in Auckland in October 2019. It will require $3.5 million to create, rehearse and present the production, and of this $1.5 million is available for investment.

The Auckland shows will provide the “proof of product” to international theatre buyers, who will “purchase” the show – not just the rights – to tour their territories. Funding agencies already interested in participating include ATEED, the New Zealand Government’s Major Events Fund, and sponsorship – such as New Zealand exporters and private individuals who have already contributed $500,000.

Investors would also receive a profit participation on their investment. Reply to this email or call me for more information. Great exposure for the right business.

The bzPay solution creates a new financial product ecosystem for Banks, Buyers and Suppliers that includes a comprehensive suite of modules to suit small and large businesses allowing them to transact payments in their country, or in the bzPay Global community platform. It allows Buyers to accelerate payments to their Suppliers – solving Small and Medium Enterprise’s (‘SME’s’) cash flow problems without the SME incurring debt, selling or funding their invoices, or having a relationship with any party other than the Buyer.

The business has completed an MVP pilot in Australia and is in partnership discussions with three Australian banks. Their next Pilot will commence in March 2019 at which stage banks will be invited into the bzPay payments platform and adopt it as a new payments platform for their customers, namely Buyers. bzPay will be opening a London office next year so that U.K. Banks can commence a process to introduce the bzPay solution as a new product offering to their customers.
The company has no debt and is currently in the midst of their Series B round of capital raising and within three days of opening, secured an Investor to subscribe to up to 40% of the A$4,000,000 raise. For more information reply to this email or give me a call.

Aspac Dairy Processing Ltd
This company owns and operates a Dairy processing plant with large scale OEM and their own product manufacturing, which is committed to Asian market supply. Multiple new nutritional and lifestyle products in fresh and long life formats are under development, with commercialisation in early 2019.

Management possessing exceptional understanding of manufacturing, logistics and supply chain is in place. As part of a rationalisation, shares are becoming available that will represent 12% of the Company. For more information reply to this email or give me a call.

PopUp and Relocatable Homes
We’ve been approached by two manufacturers of temporary or relocatable homes that have different styles and uses, which would be suitable for temporary and/or permanent housing including disaster relief. The have IP protection now or pending and huge export potential.

Early days for both. But if this is of interest in terms of investment, manufacturing, licensing, sales agent or whatever, reply to this email or call me to be on the list for further information.

Retirement Villages
The last offer for the Paeroa Village is now fully subscribed. The Promoters are about to build 2 more License to Occupy Villages in Whakatane and Christchurch. 

Favorable Tax treatment of this type of investment assists in providing extraordinary profits to investors who participate in the development. Please respond if you’d like to be on the list of prospective participants.

Looking to for a Loan?
It’s been while since I mentioned TBK Capital is also in the business of arranging loans for both property and business on a success based fee basis.

So if you’re looking borrow money, have a read of my March newsletter Finance Options Available and reply to this email with an overview of your requirements or give me a call.

Any reference above to investment is not an offer of financial products that requires disclosure under the Financial Markets Conduct Act 2013 (Act) and is available only to wholesale investors as defined by that Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. It is not an offer or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.


John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10, 120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901

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