Ratification Information Hui 26 29 August 2013 Information Hui - - PowerPoint PPT Presentation

Pouarua On-Account Deed of Settlement & PSGE Ratification Information Hui 26 – 29 August 2013

Information Hui - Purpose  Discuss:  Crown’s Pouarua On-Account Settlement Offer  Proposed Pouarua PSGE  Facilitate questions and answers  Enable in-person voting Page 2

Information Hui – ‘Housekeeping’  Key documents – available on iwi websites since voting commenced (15 August) & copies available at hui (on the table)  Crown observers – TPK representation at hui to observe only for independent reporting to the Crown (no questions to them)  Independent election scrutineers - Electionz representation here to provide iwi registration forms and collect any completed votes Page 3

Information Hui – ‘Housekeeping’  Media presence – private hui  Safety matters – exits etc  Attendance register circulating  Post hui arrangements – kai location & separate iwi PSGE hui for Ngāti Tara Tokanui (27 August) and Ngāti Pāoa (29 August) Page 4

Information Hui – Presentation Scope  Introduction and background  Pouarua on-account settlement offer  Pouarua PSGE  Pouarua ratification process  Next steps  Question & answer session Page 5

POUARUA ON-ACCOUNT DEED OF SETTLEMENT & PSGE PROPOSAL I. INTRODUCTION & BACKGROUND Page 6

Pouarua On-Account Settlement – 5 iwi  The Pouarua on-account settlement involves the following 5 iwi (alphabetical):  Ngāti Maru  Ngāti Pāoa  Ngāti Tamaterā  Ngāti Tara Tokanui  Te Patukirikiri Page 7

Hauraki Historical Treaty Claims  The 5 iwi are among the 12 iwi of Hauraki in Treaty of Waitangi negotiations with the Crown  Parallel and separate Treaty negotiations have been underway since 2009:  Iwi specific  Hauraki Collective (for shared interests, eg maunga & rivers) Page 8

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Hauraki Collective – 12 Iwi Ngāi Tai ki Tāmaki Ngāti Hako Ngāti Hei Ngāti Maru Ngāti Pāoa Ngāti Porou ki Hauraki Ngāti Pūkenga Ngāti Rahiri Tumutumu Ngāti Tamaterā Ngāti Tara Tokanui Ngāti Whanaunga Te Patukirikiri Page 10

Hauraki Negotiation Milestones OCTOBER 2010 JUNE 2013 HAURAKI COLLECTIVE POUARUA ON-ACCOUNT FRAMEWORK AGREEMENT DEED OF SETTLEMENT INITIALLED Page 11

Hauraki Negotiation Timeline  The indicative negotiations timeline is as follows:  November 2013 – initialled iwi and collective deeds of settlement  First quarter 2014 – ratification process / signed iwi and collective deeds of settlement  Mid-2014 – legislation introduced (rule of thumb = 12 months for legislation to be enacted)  Ongoing challenge of timing slippage due to Crown’s allocation of its human resources around various iwi negotiations Page 12

POUARUA ON-ACCOUNT DEED OF SETTLEMENT & PSGE PROPOSAL II. POUARUA ON-ACCOUNT SETTLEMENT OFFER Page 13

Pouarua Farm Opportunity  As part of the wide ranging Treaty settlement redress negotiations, both Landcorp farms in Hauraki were identified (Whenuakite and Pouarua)  For the first few years, only Whenuakite was on offer from the Crown  Through ongoing negotiations, Pouarua finally became available Page 14

Pouarua Farm Opportunity  Each of 12 Iwi of Hauraki had the opportunity to receive on- account financial redress (cash) to purchase the Pouarua Farm  Only the 5 iwi accepted that opportunity Page 15

Pouarua Farm  Pouarua Farm currently owned by Landcorp (SOE)  2,206 ha dairy farm  Farm held in a single legal title - farmed as 8 separate dairy units (dairy units range in size from 74 to 487 ha) Page 16

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Pouarua Farm  Single largest dairy farm on Hauraki Plains  Some of the area previously mined for peat and rehabilitated to pasture (previously a Lands & Survey Block)  Most of farm is in ryegrass and clover based pasture with 150 ha in tall fescue grass Page 19

Pouarua Farm  Dairy herd around 4,900  Last season, production at 1.6 M kg / milk solids  Milk supply is to Open Country Cheese (Waharoa)  Water supply – reticulated Hauraki District Council community scheme  All waterways fenced Page 20

Pouarua Farm  Buildings and plant comprise:  8 dairy sheds and water & milk plant / races etc  25 houses & 4 single accommodation units  Central office  Crown valuer - market value of $58.5 M Page 21

Pouarua Farm  Pouarua Farm ‘purchase price’ = $53.5 M made up of:  $51 M – ‘farm price’  $2.5 M – capex fund  The capex fund will be applied to both normal landowner expenditure under sharemilking agreements (eg, capital fertiliser) & production and technology enhancements (eg, Milk Hub)  Price does not include dairy herd (we have option to purchase Landcorp herd) Page 22

Pouarua Farm  Landcorp will continue managing the farm in a sharemilking arrangement for a 5 year period (or longer if agreed)  Vision to ultimately manage farm via our own skilled people and operate as a leading farmer while fulfilling our kaitiakitanga  Sharemilking payment ratios will help protect against ‘low’ payout years and reward ‘high’ payout years Page 23

Crown On-Account Offer  Crown will make $53.5M available now (before end of 2013) in advance of Treaty settlement being completed expected to be after legislation passed in 2015 (hence “on - account”)  Total sum made up of:  Ngāti Maru - $19,615,000  Ngāti Pāoa - $15,625,000  Ngāti Tamaterā - $15,300,000  Ngāti Tara Tokanui - $2,710,000  Te Patukirikiri - $250,000 Page 24

Crown On-Account Offer  These contributions are a portion of the total financial redress sums (cash) to be paid to the 5 iwi (alongside the other commercial and cultural redress in the respective settlements)  Four of the 5 iwi will also receive financial and commercial redress from the Tamaki negotiations  Ability for each iwi to sell down their interest, eg if money required for other purposes  Pre-emptive right among the 5 iwi if any desire to sell their share (part or whole) Page 25

Crown On-Account Offer  Benefits of on-account payment include:  No debt required to purchase Pouarua Farm  ‘Free use of money’ until settlement effective (first half 2015)  ‘Milk cheques ’ / dividend in the meantime  When settlement effective in 2015, iwi can raise a proportion of debt on the Pouarua Farm to free up cash for other Treaty settlement opportunities, eg purchase of commercial properties Page 26

Pouarua Farm  What the experts say:  Geoff Tizard (Curnow Tizard - Valuers) – “the purchase price represents fair value”  Bill Rys & Ross Beal (Intelact – Farm Consultants) – “the proposed sharemilking agreement represents a fair return on the asset through the normal range of milk prices and lays a good platform for increased milk production” Page 27

POUARUA ON-ACCOUNT DEED OF SETTLEMENT & PSGE PROPOSAL III. POUARUA PSGE Page 28

PSGE - Background  General position - before Treaty settlement assets can be transferred, a Crown approved legal structure must be in place to receive them  Key design factors for the Pouarua PSGE:  Enable fit for purpose iwi governance arrangements  Tax efficiency back to iwi PSGEs  Independent expert advice obtained to select best type of PSGE (Koau Capital & Russell McVeagh) Page 29

PSGE - Crown Requirements  Adequately represents and is fully accountable to all iwi members  Transparent decision-making procedures  Ensures the ‘beneficiaries’ of the settlement and the ‘beneficiaries’ of the governance entity are identical Page 30

Proposed Pouarua PSGE  Based on expert advice (as above), the proposed PSGE is a limited partnership (Pouarua Farm Limited Partnership)  A limited partnership is akin to a company, eg separate legal liability from owners (and recognised in the Limited Partnerships Act 2008) Page 31

Proposed Pouarua PSGE  A limited liability company will assist the work of the limited partnership (Pouarua Farm General Partner Limited) and will be owned by the 5 iwi asset holding companies (AHC) (being the limited partners) in their respective proportions  Crown has approved the proposed Pouarua Farm Limited Partnership as meeting its PSGE requirements Page 32

Proposed Pouarua PSGE PURPOSE STRUCTURE ACCOUNTABILITY *Controlled by and *Limited accountable to 5 iwi partnership + *Manages Pouarua AHCs which are in general partner Farm on behalf of turn respectively company the 5 iwi controlled by 5 iwi PSGEs *Appointment of three directors plus *Annual Statement 1 independent of Intent director * 5 year plans Page 33

Proposed Pouarua PSGE  A limited partnership allows for ultimate commercial structuring at the iwi level as it involves ‘pass through’ tax arrangements to the iwi PSGE level (ie, no tax paid by limited partnership) Page 34

PSGE – Wiring Diagrams Page 35

POUARUA ON-ACCOUNT DEED OF SETTLEMENT & PSGE PROPOSAL IV. POUARUA RATIFICATION PROCESS Page 36

Pouarua Ratification Process  Voting period: 15 August to noon, Friday 13 September 2013  Ratification Information Hui: Monday, 26 to Thursday, 29 August 2013 Page 37