Archive | Richina Pacific

Bermuda-registered Richina Pacific quits NZ register, but subsidiaries remain

Published 5 July 2009

Richina Pacific Ltd gave notice this week that it intends to stop carrying on business in New Zealand.


Richina Pacific is registered in Bermuda and has carried on business in New Zealand as an overseas company since 2003, when it replaced a local company of the same name on the New Zealand Companies Register following a vote to delist from the NZX.


Despite the departure of the group parent, various New Zealand subsidiaries continue to operate – Allied Projects Ltd, Mainzeal Project Services Ltd, Mainzeal Property & Construction Ltd, MLG Ltd (ex-Mair Leather Group Ltd), Richina Ltd & Richina Land (NZ) Ltd.


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Attribution: Company notice, register, story written by Bob Dey for the Bob Dey Property Report.

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Richina Pacific privatisation approved

Published 16 December 2008

Richina Pacific Ltd will be delisted after shareholders voted yesterday in favour of amalgamation with 3 private Richina entities – Richina Ltd, Richina Enterprise Holdings Ltd & Richina Enterprise Holdings (SLC) Ltd.


Shareholders can retain their investments in the company, but will be offered buyout opportunities 3 times in 2009. Those who accept the buyout now have been offered 45.47c/share, double the price on 18 November, the day before the amalgamation proposal was announced, and still above the price today, 42c.


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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

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Query on sharp Richina Pacific share price drop

Published 11 October 2006

Richina Pacific Ltd said last night a broker’s letter might have spurred a drop in its share price from 49c on Friday to 38c on Tuesday.

NZX Regulation queried the 22% drop, combined with higher than usual volumes traded. Richina Pacific said it was unaware of any reasons relating to the operations of its various businesses for the drop in share price: “There has been no fundamental change in the operating status, or the outlook for any of its trading operations, since directors last reported to shareholders and the exchange, as confirmed in the half-year report distributed to shareholders on 29 September. “We are, however, aware that a market analysis, in its subscription-based monthly newsletter issued today, has indicated that the Richina Pacific shares are, in their opinion, a sell proposition, and that analyst is selling its modest holdings in Richina Pacific shares.”

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Attribution: NZX Regulation statement, story written by Bob Dey for this website.

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Turnaround at Mainzeal as Richina profit rises 15%

Published 30 August 2006

Richina Pacific Ltd said yesterday the Richina Land sector, which includes the New Zealand-based Mainzeal Property & Construction operations, has turned round from the first-half loss it made last year.

Richina Land reported $US1.6 million ebit (earnings before interest & tax) compared to a $US2.8 million loss for the half in 2005.

“This evidences a strong recovery by Mainzeal, reflecting the intensive efforts put in over the last 12 months by the board, senior management & staff,” Richina Pacific chairman John Walker said.

“All regions other than Auckland reported record results. Further provisions have been taken for the Auckland Arena and the Scene apartments projects. The directors’ expectation is that, with these further modest provisions, full losses have been provided for these projects. The forward workload of Mainzeal is a solid $NZ227 million.”

The whole Richina group increased net profit by 15% to $US3.6 million and Mr Walker said it expected to deliver a better second-half result.

First-half revenue rose 2.1% to $US240.2 million, shareholders’ equity was up $US7.4 million (8.9%) to $US91.3 million, of which $US3.2 million came from unrealised currency translation adjustments.Mr Walker said the Blue Zoo Beijing aquarium made a positive contribution, the industries sector (incorporating all Richina’s Chinese manufacturing operations) made $US1.2 million ebit and its financial sector made $US3.4 million ebit.Richina Pacific has total assets of $US261 million and improved its equity ratio from 32.1% a year ago to 35%. Earnings/share increased by 14.4%, from 2.09c to 2.39c/share.

Mr Walker said the losses on the Auckland Arena and the Scene apartments projects were substantially provided for in the prior-year results, but the majority of the cash impacts of those provisions were reflected in the cashflow from operations of the current year. Despite this, the cash & cash-equivalents held by Richina Pacific were $17.9 million at 30 June.He said Richina was investigating & pursuing new ventures in the property sector but these weren’t likely to have a significant impact this year because they required considerable planning & development.

Earlier stories:

2 March 2006: Richina Pacific raises profit despite Mainzeal losses, but cans dividend

19 November 2005: Scene & Arena continue as lossmakers for Mainzeal


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Attribution: Company statement, story written by Bob Dey for this website.

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Richina Pacific asks controlling shareholders for another short-term loan

Published 6 June 2006

NZX Regulation has granted Richina Pacific Ltd a waiver to enable $US5 million of bridging finance from its major shareholder its existing loan facility as matured before a new long-term facility can be drawn down.

The majority shareholder is Richina Enterprise Holdings Ltd, a group of large private overseas interests holding a combined 39.64% of Richina Pacific. The Richina Pacific board had expected to be able to use the new facility by the first week in May. The board said it had approached its major shareholder after exhausting all other options.

In 2003, shareholders approved a $US3 million loan from Richina Enterprise Holdings Ltd (then a 25.5% shareholder) to tide it over until a $US10.4 million rights issue was completed. That short-term loan was required after a dispute among Richina Enterprise partners.

Earlier story:

18 April 2003: Richina proceeds with rights issue prospectus


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Attribution: Company statement, story written by Bob Dey for this website.

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“A company which finds cause to struggle in good years & bad”, Richina Pacific heads into more restructuring

Published 2 April 2006

One of the best surprises for a visitor to Mainzeal’s headquarters up the top of Queen St was, after getting through some of the basement carpark without crashing into something, to find a turning space. With a bit of luck you were allowed to park there too.

And then, when you got up the lift, there was the chance of a recognisable reception area instead of the screens that normally made spotting the company’s corporate activities a haphazard exercise.

A decade later, not only had this mainstay of the New Zealand commercial construction industry hung in to continue building (but less of the design, fortunately) and cementing a place in doing commercial interiors, but despite a surprise loss for the year it was promised a future in the international Richina Pacific Ltd.

In the meantime, most of Richina Pacific’s business shifted to China, and the leather industry which Mainzeal had entered into in New Zealand through its investment in Mair Astley (and from which it worked to extricate itself in New Zealand) was expanded in China. Then the group head office shifted to Singapore while its corporate registration shifted to Bermuda. Now it wants to shift the head office to Kuala Lumpur, supposedly because it’s a cheaper place to run such an operation.


Nowhere in the Richina Pacific annual report, out this weekend, or restructuring announcement last Thursday from New York-resident chairman John Walker, does efficiency make a serious dent in the hyperbole. The only reason I can think of for the head office ever to have been in Singapore, and ever to move to Kuala Lumpur, is the passing whim of a member of the US-based 40%-ownership syndicate which controls – and 3 years ago probably saved – Richina Pacific.

At the end of 2001 I wrote that a letter to shareholders from Richina Pacific’s chairman at the time, Alastair MacCormick, “bears all the markings of a company which finds cause to struggle in good years & bad. It’s now firmly a leather company, focused on the performance of Shanghai Richina Leather, with a Beijing aquarium which maintains positive operating cashflow but isn’t profitable, and one remaining New Zealand operating company, Mainzeal, which will report a small loss this year but expects to make a profit next year.”

4 years on, done it again.

Restructure points, and comment

Richina Pacific Ltd lost money last year on its Mainzeal construction business in New Zealand and its Shanghai leather business (net $US7.3 million for Mainzeal, $US3.6 million for Shanghai Richina Leather), more than covered the losses through its finance operation and now wants to carry out a major across-the-world restructure which will:

certainly shift sensible board observation of Mainzeal’s business further away
place the managing director & chief executive, Richard Yan, back in Auckland when he can probably be more profitably occupied handling real estate transactions in Shanghai
create a whole new upper management structure entirely unnecessary for the Mainzeal operation in New Zealand
get Mainzeal into construction & development roles in China to which it hasn’t been suited since it completed the Blue Zoo in Beijing 9 years ago, and
leave the group in the hands of a board whose members may have great value in many facets of business but who don’t seem particularly disposed to running construction, leather and, now, Shanghai brownfields profit-maximising. Especially if they don’t live anywhere near Shanghai.

Apart from sending head office to Kuala Lumpur – home territory for Blue Zoo chief executive for the past 8 years, Tun Cheng Chiam, who will become chief operating officer – the big feature of the restructure is to submerge Mainzeal Property & Construction in an international Richina Land.

More support promised for Mainzeal

“The Mainzeal operations within New Zealand will be supported even more strongly by the larger organisation, and it is also expected that Mainzeal’s capabilities & experience will be increasingly utilised in the ongoing development of Richina Pacific’s large land & property interests in Shanghai. It is also Richina Pacific’s intention that Mainzeal will apply for a construction license in China, thereby leveraging opportunities that may be presented through the current negotiations between China & New Zealand on a free trade agreement,” group chairman John Walker said in the restructure announcement.

“During this implementation phase of merging & integrating Mainzeal into Richina Land, Richard Yan will assume the position of chief executive of Richina Land, reporting to a dedicated Richina Land board that will incorporate directors from the current Mainzeal board and will be chaired by (former NZ prime minister) Jenny Shipley.”Reporting to Mr Yan will be the newly created positions of Richina Land’s chief operating officer for construction and Richina Land’s chief operating officer for development, as well as Richina Land’s head of finance.”Following full consideration of the restructuring proposals and the associated consultations, it has been decided that the Richina Land chief operating officer for construction will reside in New Zealand, with the area managers of Mainzeal reporting directly to that position.

Reporting across the time zones

It is intended that the Richina Land chief operating officer for development will reside in Shanghai and will be supported by, and will have reporting to that position, the present general manager of development in New Zealand.”The Richina Land head of finance will also reside in New Zealand, and the financial teams of Richina Land located in China & New Zealand will report directly to that position.”These 3 senior positions outlined above will work as an integrated team to manage & develop our construction & development businesses for both China & New Zealand and they will report to Richard Yan. For the next 2-3 years, and with immediate effect, Richard Yan will be based in Auckland, where his family will relocate by mid-year 2006.”

Mr Walker added: “Even though Mainzeal is being incorporated into the Richina Land division, Mainzeal will remain a strong & valued brand and will be further developed, fully utilising the larger & stronger Richina Land operations. The experience & expertise of our Mainzeal people in construction, development, interiors & infrastructure within New Zealand will assist in the ongoing development & enhancement of Richina Pacific’s very large land & property holdings in Shanghai.”

The global outlook

Mr Walker & Mr Yan elaborated on the changes in the annual report. Said Mr Walker: “Your company is moving from being a company with a series of businesses in China & New Zealand to being a company with global interests operating on a co-ordinated & integrated basis. Richina Pacific’s businesses are focused on 3 sectors, Richina Financial, Richina Land & Richina Industries, and we are in the process of restructuring, reorganising & consolidating these businesses and of recruiting & building management teams with the needed business skills, talent & experience, together with language capabilities, that are required for a company with global interests. In the case of our operations in China, we are moving from an era in which our businesses were managed largely by expatriates to an era in which we increasingly rely on skilled & experienced local management.”

He expected Mainzeal would achieve a significant turnaround this year on the back of organisational & management changes, a strong forward workload and record results in 2005 from all other areas of Mainzeal (other than the couple of large project losses).

China real estate development plans

Mr Walker said he & Mr Yan discussed real estate development plans & the required funding with a large number of global financial institutions in 2005 and continued their dialogue: “Richard Yan, Roger Wang, senior vice-president Frank Shen & I continued to explore various financial services opportunities in China, and we remain of the view that a broad strategy for Richina Pacific that is centred on financial services & real estate development will provide the greatest returns for shareholders over the coming years. We intend to be very deliberate & opportunistic in our approach.

“We have stated to shareholders on numerous occasions that the quantum of Richina Pacific’s holdings of real estate interests in Shanghai, which were acquired in the Shanghai Leather Co & Shoe No 1 acquisitions, is truly substantial. This real estate is comprised of more than 40 parcels of land, with over 100 existing buildings comprising over 140,000m² gross floor area. This square footage can be increased dramatically over time. While these assets are accounted for under the company’s accounting policy at their historical cost until the time of their development, these are undoubtedly appreciating assets. We are focusing attention on several development projects in the Shanghai area over the next 2 years.”

Mr Yan made some interesting observations about the difficulties the new controlling shareholders encountered after they bought into Mainzeal in 1995. Their explicit goal had been to leverage New Zealand expertise to develop China-based businesses. “However, we considerably under-estimated the challenges we took on in assuming responsibility for the multitude of the historical Mainzeal & Mair Astley businesses. It would not be an exaggeration to say that we have consumed far more time & energy in sorting out the legacy issues in New Zealand than we have spent on building our China businesses.

“Still, today we are gratified by the results of our efforts in having completed the streamlining of over 100 subsidiaries of the 2 listed companies, Mainzeal & Mair Astley, that were owned at the time of Richina taking control. Furthermore, in 2005 the Richina Pacific board took the next step in finally breaking with the past by running our businesses as operating divisions rather than as stand-alone subsidiaries.”

Websites: Richina Pacific

2006 annual report


Earlier stories:

2 March 2006: Richina Pacific raises profit despite Mainzeal losses, but cans dividend

19 November 2005: Scene & Arena continue as lossmakers for Mainzeal

10 May 2005: Richina Pacific looks at leveraging off China properties

30 December 2001: Uncertain note in Richina Pacific letter


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Attribution: Company statement, annual report, story written by Bob Dey for this website.

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Richina Pacific raises profit despite Mainzeal losses, but cans dividend

Published 1 March 2006

Richina Pacific Ltd increased net profit by 32% to $US10.3 million in 2005, and increased earnings/share even more – by 26.5% to US6.82c/share – but no thanks to New Zealand construction business Mainzeal or the group’s land division.

The company has canned its dividend payment because of the Mainzeal losses, saying its profit was built on non-cash returns from the finance division.

The result was on trading revenue up 19% to $US504.6 million. Fourth-quarter net profit was in line with expectations at $US7.4 million.

At the 31 December balance date, Richina Pacific’s equity was up 28.3% to $US83.9 million, total assets up 19.3% to $US258.8 million, the cash balance was $US31.4 million and debt outstanding $US27.3 million.

Chairman John Walker said the record profit results were based on the outstanding contributions made by the Richina Financial division, which more than offset the recognition of losses within the Richina Land division. Further, no taxes were provided for in 2005 after a $US3 million over-provision in 2004.Richina Pacific reported in November that Mainzeal, its New Zealand-based construction & development subsidiary, experienced significant & unexpected losses on 2 major projects in Auckland, the Scene Apartments & Auckland Arena projects at Quay Park.

“The Richina Pacific & Mainzeal boards & management believe these losses have been provided for in the results for 2005. Steps have been taken to ensure that such losses do not occur in the future and Mainzeal is expected to have a significant turnaround in the current year.”

However, Mr Walker said the Mainzeal impact meant there wouldn’t be a dividend. “The company’s profits were non-cash gains and do not reflect positive results from the company’s operating businesses. Having resumed the payment of dividends last year, the board is deeply disappointed & greatly regrets this outcome, but believes that the necessary steps have been taken to ensure that the operating businesses achieve profits in the current year & going forward.”

Earlier story:

19 November 2005: Scene & Arena continue as lossmakers for Mainzeal

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Attribution: Company statement, story written by Bob Dey for this website.

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Scene & Arena continue as lossmakers for Mainzeal

Published 19 November 2005

Richina Pacific Ltd expects its Mainzeal construction sector to make a loss for the full 2005 year because of the Scene Apartments & Auckland Arena projects at Quay Park.

Richina Pacific now has its headquarters in Singapore, is registered in Bermuda, has the bulk of its business focus in China and reports in $US.

The chairman, John Walker, said on Thursday the group lost $234,000 on $133.9 million revenue in the third quarter, but the cumulative results for 9 months – $4.2 million net profit on $377.5 million revenue – were similar to last year and the company expected full-year net profit to exceed the $8.2 million achieved in 2004.

“Within the Richina Land sector, Mainzeal continues to suffer losses from the Scene Apartments & the Auckland Arena projects. The directors believe there are remaining uncertainties surrounding the final outcomes of these 2 projects. As a result, despite the fact that the other activities of Mainzeal & Richina Land are performing to expectations, an overall loss in this sector is now forecast for the full-year 2005.”

Most of the group’s profit for the year will come from Richina Financial, because the leather business, at Richina Industries, is forecasting a loss.

It’s again restructuring & consolidating, with a number of “significant” personnel changes. “Under new leadership, the upholstery leather tanning division has been stabilised, although there will be a sizeable loss arising from old stock disposal & provisions. The production volumes for auto leather are increasing at a fast pace, while the ovine garment & the bovine shoe operations are both below their quarterly forecast expectations. The remaining manufacturing activities of Shanghai Leather Corporation are performing ahead of forecasts. However, with a traditionally slow fourth quarter, Richina Industries is now forecasting an overall loss for the full year.”

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Richina Pacific looks at leveraging off China properties

Published: 10 May 2005

Richina Pacific Ltd chairman John Walker told the company’s annual meeting in Auckland today it would seek global operating companies as partners to help it realise the value of the operating companies & real estate it controls & owns in China.

Mr Walker said Richina, owner of a leather business near Shanghai and, in New Zealand, Mainzeal Property & Construction Ltd, was transformed when it bought the Shanghai Leather Co recently.

It now had an extraordinary asset base in China and could leverage its “China knowledge”.

Mr Walker most international businesses would establish operations in China sooner or later, and many would choose to do so through a “trustworthy partner” with an established China track record rather than try to go it alone.

He said Richina, with its structures, experiences, local knowledge & western-based governance structure, could leverage an international partner’s proven business models, technical know-how, brands & distribution.The Shanghai Leather acquisition brought ownership control & interests in more than 50 former Chinese state-owned enterprises, and controlling rights over 43 parcels of land in Shanghai.Mr Walker said Richina now operated in 4 broad sectors – finance, land, industries & services – and its role had changed to one of “linking China & the world”. He said property & land development there would become a very significant business for the company.”We will not be able, nor should we try, to develop all the assets we currently own in China through our own resources. We need to attract the involvement of global partners, both operationally & financially, and we need to work as partners with the best world-class architectural firms, property developers, construction firms & contractors.” The changed nature of Richina’s business meant it would need significant amounts of capital, which could come from issuing new shares or co-investment with related & unrelated parties. Mr Walker said the board & management were working out long-term funding plans, and shareholders would be asked to consider options at the next annual meeting.As for the present, Mr Walker said that after the first quarter trading was on target for a better result than last year. The first-quarter net profit of $US138,000 compared to a $US800,000 loss last year. Revenue rose 42% to $US107 million. Richina intends reporting quarterly in future, and also to seek a Singapore listing at some stage.

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Timing cuts Mainzeal input into better Richina Pacific half

Richina Pacific Ltd increased June half net profit by 18.2% to $US2.38 million (it reports in $US now that’s registered in Bermuda & based in Singapore) on revenue up 18.9% to $US184 million.

At Mainzeal, the one remaining New Zealand business in a company which used to be all about construction, the $NZ1.2 million ($US700,000) net profit was down on a year ago, but the 2003 result included a gross $US2.1 million from the realisation of the sale of the Mobil-on-the-Park development in Wellington.

New independent chairman John Walker, from New York, said construction, interior fitout & development activities were buoyant, reflected in a forward workload up from $NXZ223 million to $NZ325 million.

That includes a number of high-profile projects – the TelstraClear Events Centre in Manukau City, the Quay Park Arena, the Westfield mall & cinema project in Christchurch and the $NZ46 million Defence headquarters for Capital Properties NZ Ltd in Wellington.Mr Walker said Mainzeal’s first-half result didn’t appropriately reflect on its performance, due to timing, and its 2nd half should look better.

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