News } TBK Capital

Isolation has its advantages

I guess most of us love living in New Zealand, so it’s interesting to see how Wikipedia sees us. And with the world wide Corona-19 virus scare, it’s rather nice to be here.

I guess most of us love living in New Zealand, so it’s interesting to see how Wikipedia sees us. And with the world wide Corona-19 virus scare, it’s rather nice to be here.

So it’s also heartening to read an article in Medium entitled The New Leader of the Free World where it highlights our - and Canada’s - differences from other countries.

It notes that “within New Zealand’s 268,021 square kilometres”:

  • It produces almost all forms of food it needs and likes.
  • It’s got almost all the sporting/recreational locations you can imagine.
  • And it’s got racial harmony within its diverse population.

According to the author “Societies like America have a grim, grim future precisely because their Darwinian values — let the weak perish, so the strong survive! — are going to produce more and more grotesque dystopias in an age of existential threats. By contrast, societies like New Zealand and Canada are far, far better prepared.

They understand the mathematics of catastrophe: pay a little bit now, to stop the problem getting much worse, spinning out of control, later. Lock down now — prevent death from reaching American levels. Do the right thing — because the right thing is how we have more of a common good. There is more to go around for everyone when we mostly do the right thing, the good thing, the natural thing”.

A great example of the benefits of our geographical location is isolation in times like the Covid-19 scare. More and more international investors are seeking a stable business environment, and even a “bolthole” in the event of war - or the other nasty stuff we continue to see in Europe, Asia, South America and even the U.S.

Currently all people entering New Zealand must go immediately into managed isolation or quarantine facilities and need to remain there for at least 14 days. And it’s being managed seriously. There has of course been the inevitable chaos around this, however it has had a number of unexpected benefits.

First, the Covid-19 scare has heightened New Zealand’s desirability as a place to live. And second it’s becoming an attractive place for businesses to commence and for people to invest. For obvious reasons our Government is behind all this.

So if you’re of the same view, here are some examples of investment opportunities TBK Capital can offer.

Retirement Villages
We’ve all heard the expression that the only certainty in life is death and taxes. Well that’s not new – here’s one of the most famous suggested by bolthole in New Zealand.

We have client who is an experienced Property Investor and Developer and holds an option to purchase a vacant elevated site atop a prized bay-side location known as ‘The Cliffs’ in Nelson, upon which he intends to build a luxury home on the site for sale. The target audience is offshore investors. The construction and sales budget provides for $840,000 to be raised from investors and $1,560,000 bank finance which has been arranged.  The price of the land is approximately 26% of the build costs.

The property will be owned 50% by interests associated with the promoter as his fee for securing, arranging, and managing the construction of the house and its sale, and providing a personal guarantee on the loan raised to assist in the purchase of the section and the development of the house. The other 50% will be owned by the investors who will not be required to guarantee that loan.

The budget shows a time frame to build and sell the house of 2 years and a budgeted 42% pre-tax return to investors. The marketing policy to attract prospective buyers of the completed house will include the services of Jeremy Matthews at Bayleys Real Estate in Nelson. An overview of their marketing campaign is available here via this link or on request. For a copy of the IM reply to this email or give me a call. For those of you who have already shown interest a copy of the new revised IM will be sent to you.

Blue Chip and Government Clients
EPCM provides industrial electrical services to blue chip businesses, and government SOEs. Its name stands for Engineer, Procure, Construct, Maintain. All switchgear and switch room works are one off, so they are custom-made in nature. In addition to selling and installing industrial switchboards, it offers maintenance contracts which provides the business with regular income.

The business is capability ISO accredited and competition is minimal. It has been operating for 20 years in a highly technical and regulatory market with significant barriers to entry. It was deemed an essential business during the Covid-19 lockdown and has ISO 9001, ISO 14001 and BS OHS 18001 Registration.

Its Customers include Vector, Spark, Vodafone, Fulton Hogan, Auckland Airport, Santos, Chevron, NZTA, Queensland Curtis LNG, Rio Tinto, Siemens, Ryman and Transpower. The revenue profile is 40/40/20 - 40% deposit, 40% on factory acceptance testing and 20% on delivery and accordingly jobs become self-funding.

So cash flow is immediate and progressive with each order. This is non-standard in the industry, and even in the wider economy. EPCM can require these payment terms due to its ability to be able to complete complex tailored contracts.

EPCM is seeking working capital of $500,000 to finance the expansion of its current operation through the issue of new ordinary shares. Based on a recent valuation of the business this is equivalent to 22% of the shares in the company. For a copy of the IM reply to this email or give me a call.

Southland Silica
Our client is an experienced mining engineer whose company holds title to New Zealand Petroleum and Minerals (NZPAM) permits in Southland adjacent to Manapouri - one of the world’s finest hydroelectric generation stations - under which permits lies under explored gold and silica deposits.

His company holds an exploration permit covering 7,500 hectares of the Waimumu Quartz Gravels. The exploration permit contains an inferred Ore Reserve of 50 million cubic metres of high purity silica and 50,000 ounces of gold. 

The company's mining permit, internal to the exploration permit, is the only drilled and consented high purity silica and gold mine in Southland with an indicated Ore Reserve of 2 million cubic metres of high purity silica and 10,000 ounces of gold. 

Electricity is a major cost component in the reduction of high purity silica to poly-silicon the raw material for the manufacture of PV componentry. So the opportunity our clients is to invest in an operation that converts Southland silica to the raw materials for solar panel manufacture and liquid silicon "sun in a box" renewable energy storage. The gold is a bonus.

An IM is the process of being prepared so if you’d like a copy reply to this email 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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