News } TBK Capital

Sping has sprung!

In it I made the observation that in a report on a recent survey, instead of saying 31% of businesses expected a deterioration in general economic conditions over the coming months, should have said 69% didn’t expect a deterioration - which my logic says is the mathematical result. But maybe that’s just me.

Don't stop, thinking about tomorrow,
Don't stop, it'll soon be here,
It'll be, better than before,
Yesterday's gone, yesterday's gone.

Fleetwood Mac - Roumers

It’s now been a few months since I sent out my last Newsletter – Procrastination is a thief of time.

In it I made the observation that in a report on a recent survey, instead of saying 31% of businesses expected a deterioration in general economic conditions over the coming months, should have said 69% didn’t expect a deterioration - which my logic says is the mathematical result. But maybe that’s just me.

One matter that’s been concerning me though, is that after two years in government, Jacinda Ardern has made a marvelous entry into politics and received international recognition.  But I’ve never really heard about what the government, or anyone else in the government, is doing. Other than Winston Peters of course, but even he’s been pretty quiet.

Well my hope of looking at some of the positive things the government is there to do for us has now been answered. Only last week, Finance Minister, the Hon Grant Robertson, in a release on the topic “trends and opportunities for the New Zealand economy”, made the comment “Today I want to voice my own perspective on this subject – namely that the New Zealand economy is in good shape. We have a lot to be positive about, and we should be careful not to talk ourselves into a downturn.”

He claims his view is supported by a comment made in an earlier Herald article by Liam Dann who wrote, “Cheer up. New Zealand's economy is not sliding into recession [...]. Over the next several months it looks like we'll see stabilisation. Increased government spending, monetary policy stimulus and a pretty healthy trade balance will battle with global uncertainty and the fallout from low business and consumer confidence.”

Robertson goes on to say the statistics support his claim that “the New Zealand economy is in a good place right now. Growth in the June quarter was 0.5% and 2.4% in the year. We are growing faster than Australia, Canada, the UK, Japan, the Eurozone, and the OECD average. Unemployment of 3.9% is at its lowest rate in over decade.”

This is a good read - especially the eight key shifts mentioned in it - and the policy actions related to each. I recommend it.

Renewed interest in investment
With interest rates at a record low this not only encourages investment in property and business but also discourages having “money in the bank”.  

We’ve got a few clients out there seeking capital and have recently received renewed interest in the offers they have. Some of these are show on our website and Information Memorandums have been updated where required.

So here’s a quick summary of some of them.

Retirement village – long term profitable & tax effective investment
This is an update of the recent Offer that went out to our Opportunities newsletter list last month. The License to Occupy village will be built in Amberley just out of Christchurch, and is the third this developer has under various stages of construction. The resource consent process for the development is under way. The local council is supportive of the project and is about to appoint a special project team to fast track the consent process.

The business is seeking to raise $5 million equity in the form of a special partnership. Loan finance has been arranged and the purchase of the land was completed last week. It will be some weeks before earthworks and civils can commence.

In the meantime the Offer to invest is still open. These developments are highly profitable. According to the development budget, for a $100,000 investment, on completion of the Village, there is a budgeted $166,000 profit to valuation.

And this profit is tax free, as for LTO retirement villages there is no tax on development profit. These Government incentives flow could through to investors on a personal basis as they are members of a limited partnership. This could also provide long term tax benefits on other taxable investment were they all say in a family trust.

By the time the village is completed, it is predicted to be generating an annual income to investors - from the resale of the LTO units - of $70,000 each year. And this should increase over time.  At the time all the LTOs are filled the estimated value of an investor’s asset, which cost $100,000, could be up to $700,000.

For a copy of the Information Memorandum reply to this email or give me a call.

Liquidstrip – new updated IM available
Much has taken place since the original Information Memorandum for this Offer was produced. LiquidStrip has a patented effluent management system that converts liquid waste streams into clean water and solids. It uses a multi-stage process combining their proprietary chemical flocculation stage with mechanical filtration.

Since the Resource Management Act came into force in 1991, the compliance requirements associated with industries like dairy; concrete; meat processing; aquaculture; dredging; and mining, have already resulted in immediate applications for LiquidStrip in the dairy, concrete and trade-waste sectors.

The original applications for which the process was invented - cleaning cowsheds and concrete trucks – has attracted local bodies and councils without any pressure (so far) from the public. But more recently the largescale problem of storm water runoff - especially in our major cities - has resulted in central government, regional councils and territorial authorities enforcing compliance with an increasingly robust and pervasive framework of controls.

An update newsletter was sent to those on our Opportunities newsletter list earlier this month and a new updated Information Memorandum reflecting the renewed interest in LiquidStrip’s solution is now available. For a copy reply to this email or give me a call.

DryNZ – capital raise for expansion
Here’s another business that TBK Capital’s been involved with for some time now. It produces a range of dried fruit and medicinal products from New Zealand growers for local and export markets.

The business now needs to upgrade its facilities to increase production and meet the increasing demand for its products. The key equipment involved, and the major use of funds raised, is to purchase a Bucher Dryer, which is far more modern than the existing equipment and has about 5 times the capacity.  The use of the funds raised includes other new and equipment and a factory upgrade, which will contribute to increase their drying capacity.

An updated newsletter was sent to those on our Opportunities newsletter list earlier this month and a new Information Memorandum is available. For a copy reply to this email or give me a call.

Other Offers

Here’s a business that’s designed a proprietary system to build the components of modular homes in a factory for assembly on site. It’s a proven system in the U.S., Europe and Asia. Their plan is to partner with noteworthy developers to produce houses in volume in a shorter time.  It’s now raising capital to support demonstration homes. The original Information Memorandum is available on request.

Manuka Oil Plantation
Our client has a lease of 800 Ha of Crown land in Northland with fully grown Manuka and Kanuka. He has the sole right to harvest and produce Manuka and Kanuka Oils. A relatively small amount of capital is needed to update existing equipment and streamline the harvesting. This would be a precursor to expand the business to provide the Oils to distributors awaiting supply to sell it internationally. Contact me for more information.

Bestmate Petcare
Established in conjunction with Massey University’s Veterinary and Nutrition department, Bestmate Petcare is developing a range of pet foods and beverages. The first innovative beverage, Bestmate K9H2O, provides hydration and overall wellbeing for dogs and contains natural ingredients including vitamins. It is now raising capital to assist in launching an international market for its products. Contact me for more information.   

Want to Know More?
If you’d like comment on this newsletter, or to know more about any of the Offers above, email or call me on +64 21 902 901.

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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