New investor group for dam
Waimea Irrigators Ltd has issued a replacement prospectus for the Waimea dam project, and it’s missing a much-talked-about mystery investor.
The replacement product disclosure statement (PDS) instead outlines a new ‘‘investor vehicle’’ – made up of a group of local family businesses on the Waimea Plains. The investors are not named but four are on the WIL board of directors.
The replacement prospectus comes after changes were made to the financial model for the multimilliondollar dam project.
Waimea Irrigators Ltd (WIL) and Tasman District Council are proposed joint venture partners in the project, earmarked for the Lee Valley.
Changes to the financial model were made after it was revealed estimates for the project had blown out. Once finalised, the updated pricing took the remaining capital costs for the project from an estimated $75.9 million to about $99m, leaving the council and WIL to find an additional $23m between them.
The bulk of WIL’s $11.5m share of that $23m funding gap was tipped to come from an external New Zealand investor, which has not been identified.
However, WIL said on Monday that the situation had now changed. Chairman Murray King said that during investor due diligence, WIL determined there was too much risk in the proposal.
‘‘We were tremendously grateful to have the proposal and the willingness to help,’’ King said.
‘‘In the end, we concluded that the terms would increase costs to our shareholders and the investor would carry less risk while WIL would carry substantially more risk, and that was not acceptable to the organisation.’’
However, a ‘‘group of local businesses’’ had committed to invest $11m in WIL by way of a new ‘‘investor vehicle’’, made up of a group of local, intergenerational family businesses on the Waimea Plains, he said.
Negotiations were being finalised and remained confidential ‘‘but all commitments have been made’’.
‘‘Fourteen businesses will collectively purchase 2000 convertible notes in WIL at a cost of $5500 per share, the same price our share subscribers have paid for water shares,’’ King said.
‘‘These family businesses have been around for generations. They have invested in our communities, are committed to Tasman and Nelson, and want to stay here and flourish. They need water security and they’ve really stepped up enormously to see this project through.’’
Irrigators knew there was ‘‘no realistic plan B’’ if the dam did not proceed, King said.
‘‘Yes, large irrigators would likely find individual solutions at their own cost. But small irrigators and small landowners would struggle. The council would have to find another solution for urban water supply, one that would be much more expensive to ratepayers.’’
WIL share subscribers are set to receive the replacement PDS, and will have one month to review it and return a confirmation notice to reconfirm their subscription.
The Tasman District Council welcomed the announcement.
‘‘The change of investor should give ratepayers comfort, as it reflects a higher level of commitment to the success of the scheme and the future of the Waimea,’’ said Tasman Mayor Richard Kempthorne.
The investment model in the revised PDS does not change the obligations on council ratepayers as discussed at the September 6 council meeting.