Skeggs Group sheds Pacifica Salmon

The Milford Sound harbour, pictured last month,  will be enlarged to boost passenger capacity...
The Milford Sound harbour, pictured last month, will be enlarged to boost passenger capacity from 400,000 to 550,000. Photo by Milford Sound Development Authority.
The former Milford Sound Red Boats fleet, bought by Skeggs Group in 2008 for $17.3 million, now...
The former Milford Sound Red Boats fleet, bought by Skeggs Group in 2008 for $17.3 million, now operates under Southern Discoveries. Photo by Southern Discoveries.

Dunedin-based Skeggs Group has divested itself of most of its aquaculture interests as it continues to reinvest heavily in its expanding southern tourism holdings.

It sold the majority of its aquaculture assets to listed Sanford Ltd in November 2010 for $85 million. At the time, it retained its Bluff oyster and salmon holdings, but the latter have just been sold to Malaysian-majority interests for almost $1 million.

The privately owned 60-year-old Skeggs Group has sold its Pacifica Salmon Ltd subsidiary company for $950,000 to The New Zealand King Salmon Co Ltd, a Malaysian majority shareholder company which this week gained consent from the Overseas Investment Office for the purchase.

The asset is 5.65ha of freehold land, which includes a salmon hatchery at Rotherham Rd North, Waiau, north Canterbury, and the buyers intend to increase production capacity.

It was understood Pacifica Salmon Ltd had two salmon farms in the Marlborough Sounds and development interests elsewhere.

The New Zealand King Salmon Co is 53% owned by the Malaysian Tiong family, 45.5% through its public listing and 1.5% by ING Private Equity Access Ltd of Australia.

The Skeggs family was reported by the National Business Review to be worth $65 million in 2010 and $85 million in 2011.

The family-owned Southern Discoveries last year bought a 50% share in Queenstown's Kawarau Jets, and took over the Te Anau-based coach and tour operation Go Milford and Go Fiordland's Information Centre, the two-boat Queenstown Fishing Charters business, a retail store and a cafe and bar.

Skeggs Group managing director David Skeggs could not be reached for comment yesterday.

Less than a fortnight ago, it was announced Milford Sound's main harbour would undergo a $6 million upgrade involving the rebuilding of the 22-year-old breakwater, scheduled to begin this month.

The Milford Sound Development Authority (MSDA), of which the Skeggs Group owns 49% , Real Journeys 49% and the Southland District Council 2%, has approval from the Department of Conservation and Environment Southland to extend the basin 10m from shore.

The MSDA is a private company responsible for the facilities and infrastructure at the harbour. The Skeggs Group took a stake in it in 2008 as part of wider Milford Sound investment at the time.

In June 2008, Skeggs bought Milford Sound Red Boats from listed Tourism Holdings Ltd for $17.3 million, including its high-profile Red Boats passenger service operating in Milford.

The Milford assets included five day-trip Milford Sound Red Boats, the Milford Deep Underwater Observatory, the Blue Duck Cafe and the 49% shareholding in the MSDA.

In the late-2010 Sanford deal, which had Commerce Commission clearance, the assets subsidiary companies of the Skeggs Group sold to Sanford included more than 70 marine farms, 10 vessels, properties in the Marlborough Sounds and Christchurch and processing facilities.

The deal covered 100% of the mussel, Pacific oyster and associated processing assets of Skeggs subsidiary Pacifica Seafood Ltd's greenshell mussel and Pacific oyster businesses, but excluded Skeggs Group's salmon assets.

At the time, Skeggs Group managing director David Skeggs said up to 49.9% of all aquaculture assets were being considered for sale, but it was decided to sell 100% of the mussel and Pacific oyster assets.

Skeggs Group retained Pacific Seafoods (Dunedin) Ltd, which harvests and processes Bluff oysters, and Pacific Salmon Ltd.

The Skeggs Group retains a widespread portfolio of other interests, including Pacifica Shipping Ltd, Port Denarau Marine Ltd in Fiji, Akarua Winery in Bannockburn and tourism ventures in Milford Sound and Lake Wakatipu, operating under Southern Discoveries Ltd.

The company's tourism holdings include Southern Discoveries' interests in the $500,000 Milford Discovery Centre and Milford Deep Underwater Observatory in Milford Sound.

Before the Sanford aquaculture sale, Skeggs Group had reported annual turnover of $125 million and employed up to 500 people.


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