Covid-19 – an Opportunities update
While New Zealand has weathered the Covid19 scare better than just about every other country in the world, we have not been untouched by the pandemic.
Some speak of the future,
My love she speaks softly,
She knows there's no success like failure
And that failure's no success at all.
Bob Dylan – Click here for excellent video of my favourite song
While New Zealand has weathered the Covid19 scare better than just about
every other country in the world, we have not been untouched by the
pandemic.
And while it’s been a good test for all of us, and in many cases changed
business habits for the better - including the ability to work from
home - one of the negative consequences for businesses is the struggle
to recover from having been “shutdown” for so long. Reduced imports are a
good example.
It’s also possible some permanent changes may well result from this. For example I read an excellent article in the May NZ Business entitled “What’s next for retail” which made the obvious point that “you’re
literally a sitting duck if all you do is sit in a store hoping people
will come in. Foot traffic is no longer a guarantee and the tap can be
turned off abruptly”.
Or as the CEO of Retail NZ, Greg Hartford puts it, now is a good time for retail businesses to reassess their offering by “providing great products at great prices – whether that’s online, via social media, or in-store”.
Meanwhile as the Minister of Finance Grant Robertson warned his first major pre-Budget speech, while New Zealand exports are getting out to the world, “supply chain issues” will
continue to affect the country for the rest of this year and
potentially into 2022. The good news is he’s about to set up an implementation unit “to make sure Government policies actually happen.”
Business opportunities
What is interesting, is over this “lockdown” period TBK Capital has
continued to have new investment opportunities presented to us. Some of
these prospered as a result of this country’s isolation, and others are
flourishing from New Zealand’s international exposure at that time.
Meanwhile significant developments have taken place with many of the original Offers we sent to all of you on our Opportunities mailing list – join here
if you’re not already on it. And while updates have been sent to those
of you who have previously show interest in a particular Offer, these
changes may now attract more attention to those of you who have not
received notice of them.
Accordingly I thought it was about time for another Opportunities
Update. Most of the following have been the subject of previous
Newsletters and are on our website. Space prohibits recording all of them, or even the full details of each Offer.
So for those of you are interested, call me on 021 902 901 or reply to
this newsletter for a copy of the IMs describing those you find
attractive.
International diagnostic business
Pictor is an international business that delivers affordable and
easy-to-use diagnostic testing for COVID-19 and other diseases. Their
test is expected to be 10 times cheaper and three times quicker than traditional methods. The company raised $2,869,000 million via a share Offer TBK Capital promoted earlier this year.
This was heavily oversubscribed, and as a result of the publicity
and interest in this topical international business, the owners have
decided to offer investment of an additional $2,000,000 via a new share
issue.
This new Offer will be the subject of a new IM and another Opportunities
newsletter both of which will be available soon. Due to the expected
demand please let me know if you’re interested by return email.
Online grocery store - order & delivery
In 2020 online grocery sales surged 40% to around about 15% of total
sales, with predictions that 80% of grocery shopping and delivery will
be online within 5 years.
Currently operating in Auckland, our client, Totara and Bear, has the intention to dominate the Global FMCG and Recycling industries by using smart technology. While world class micro fulfilment centres
productivity ranges from 7,000 to 15,000 orders per week, our client’s
advantage is it has designed a process enabling it to process 500,000 to
800,000 per week, plus - as an entry barrier - being able to process
all the resulting recycling material.
It is now in the midst of a capital raise of $500,000 to increase its
capacity to take online and deliver grocery products. The issue will
equate to 20% of the shares in the business on issue now. There remain
some shares left, so for a copy of the IM reply to this email now.
The next fund raising round will focus on the overseas opportunity to
operate as a 3PL (third party logistics) partner with leading
international grocers such as Tesco and Walmart.
This is an exponential jump and they will be looking to raise $millions
on the back of international client agreements to replace 8,000
supermarket stores with 150 “Micro Fulfilment Centres” across the U.K.
and North America.
Invest in affordable housing
Reed Myers
is a Residential Property Development company, concentrating on the
First Home Buyer and Affordable Housing markets. The emphasis is on
Auckland.
They are currently offering investment in a development in Massey which is 100% unconditionally sold
to home buyers. The total project cost is circa $24.5 million. The
investment is in the form of Preference Shares in the development
company.
Investors will receive a projected 11% p.a. return over a minimum term
of 9 months, plus a share of the development profit on completion of the
development.
The minimum investment is only $5,000 and the IM is available now.
Southland Silica
Southland Silica Limited holds New Zealand Petroleum and Minerals exploration permits close to the Manapouri power station.
Underneath its permits - which cover 7,500 hectares - lies gold
reserves plus an Inferred Ore Reserve of 50 million cubic metres of high
purity silica.
This silica can be reduced to metallurgical silicon and has sufficient product to manufacture the next generation of EV batteries for over 50 years.
Our client predicts the transition from hydrocarbon powered vehicles to
EV powered is inevitable, and an Israeli firm is already producing
silicon lithium-ion anode batteries that can be charged as fast as
filling a car with petrol.
Their business will operate at the Awarua Industrial Estate,
using Manapouri electric power, and could generate sales of $30 million
per annum plus another $20 million per annum from the gold by-product.
Meanwhile another very experienced silica and gold miner, also working
on the Waimumu Quartz Gravels, has consented to add his two mining
permits, and his experience, to this project.
Limited space in this newsletter precludes me listing the opportunities
this license opens, and the multiple ways in which it could proceed.
It’s a venture that could also suit some form of “active participation”
from an investor. Email me for a copy of the IM and once you’ve read it
we can discuss the ways forward from there.
EPCM
This is a family business owned and operated by two brothers from two
locations in Auckland and specialises in the design and manufacture of
containerised power reticulation and energy storage systems.
It was deemed part of the supply chain of essential businesses by the
Ministry of Business, Innovation & Employment, and an essential
service during the Covid-19 crisis. It has delivered products for many
global and regional companies such as, Vector, Spark, Vodafaone, Fulton
Hogan, Transpower and Rio Tinto.
The company is looking for a cash injection via the issue of new
ordinary shares to consolidate its gains in business operations and cost
savings, fulfil its order book, and increase its working capital
reserves. It intends to raise up to $500,000 via the issue of new
ordinary shares in the company. This represent 23% of the shares that
would then be on issue.
The directors’ intention is to build the business up for a trade sale
within 5 years. Possible buyers include large corporates like Fulton
Hogan.
Nobilo Wines
Here’s a business that’s looking to take a new and unique spirit liqueur
to market - initially in New Zealand and then internationally. Six
years in development the liqueur has its roots in the well-known Nobilo
brand. The liqueur can either be drunk on its own, or promoted as a
cocktail mixer, and has already won international awards prior to
launch.
Market research shows a huge market opportunity over the next 7 to 10 years. Grand View Research Inc.
based in California released a report on 8 December 2020 that shows an
expanding market size for ready to drink cocktails anticipated to reach
$1.63 billion by 2027 at a compounding annual growth rate of 12.1%.
The new business has finalised production and distribution arrangements
and has sufficient initial stock to enable a successful commercial
launch of the brand. The goal is to launch the liqueur in March this
year, and then in 3 years promote an IPO of the business to expand the
brand internationally to create the opportunity for acquisition or
merger of similar businesses.
The model is not dissimilar to the highly successful float of 42 Below
Vodka which after 7 years was purchased by international spirit giant
Barcardi for $138 million.
A new company has been formed to take advantage of this growth. The
vision for the business is to make the liqueur the most successful
global spirit liqueur within 7 years.
It intends to raise up to $750,000 via the issue of new ordinary shares -
which represent 49% of the shares that would then be on issue – the
proceeds of which will used to set up the business for a sale to already
identified parties.
Looking for a loan?
Most of our newsletters are specific about the investment opportunities
we have available. But don’t forget a large part our business is
arranging loans for property and for businesses.
I’ve had 50 years’ experience in this business, and there has always
been, and always will be loans your bank cannot help you with - but we
can find a lender that will. If you’d like to know more call me on 021
902 901 or reply to this email.
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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.
Cheers
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
Email john.paine@tbkcapital.co.nz