Investors’ Vision helps make Sky Waka a reality
The Sky Waka gondola is racing towards final completion with a significant milestone achieved last week when it opened to the public for the first time.
As the team work hard on finishing the buildings and associated works in time for the Official Opening function in a couple of weeks, Ruapehu Alpine Lifts (RAL) CEO Ross Copland reflects on how this significant project came to life despite unique balance-sheet challenges created by the charitable purpose and Public Benefit Entity status of the company.
“Over the past 3 years we have invested over $50m redeveloping Whakapapa, New Zealand’s largest ski area. The Sky Waka Gondola is the most spectacular of these developments, and it was also the most innovatively funded with all capital being raised through new external sources.
“RAL’S Constitution prevents distributions or benefits of any kind being made to shareholders, so we had to come up with a clever way of providing an equity-like return to debt-holders in order to attract investment, and we knew we would need a foundation investor to get the ball rolling,” says Copland.
“It was June 2017 when investment discussions began with a group of experienced investors from various Ngati Tuwharetoa commercial entities. As a result they came together formed the Tuwharetoa Gondola Limited Partnership (TGLP) and took the largest stake in the bond offering at $9.5m, or 66% of the bonds on offer – this huge contribution is what ultimately allowed the project to progress, we simply couldn’t have done it without the support and vision of Ngati Tuwharetoa’s network of experienced investors who quickly connected the dots between the economic, social and cultural opportunities that could be leveraged through this key asset in their rohe.”
The entities investing in the TGLP include Waihi Pukawa Trust, Tuwharetoa Maori Trust Board, Lake Taupo Forest Trust, Tuwharetoa Settlement Trust, Lake Rotoaira Forest Trust, Lake Rotoaira Trust, Te Pae O Waimihia Trust and Ngati Tuwharetoa Fisheries Charitable Trust.
TGLP Chairperson Rakeipoho Taiaroa says, “An investment like this allows us to be a part of the story and have an ongoing connection with our maunga. RAL is one of the biggest employers of our people all year round, the environmental footprint on the maunga has been reduced through removal and consolidation of old infrastructure. Most of the investors are Tuwharetoa land trusts that surround the northern side of the mountain so naturally have a very close connection with the maunga.”
The Provincial Growth Fund (PGF) announced in June 2018 it would provide a $10 million loan to Ruapehu Alpine Lifts Ltd for the construction of the new gondola. At the time, Regional Economic Development Minister Hon. Shane Jones said, “The project has been identified through the Manawatū-Whanganui Accelerate 25 plan and the Ruapehu Regional Visitor Development Plan as key to boosting the local economy. It is easy to see why – the economic potential is significant and Ruapehu Alpine Lifts is committed to recruiting locally. The Gondola has the potential to be the linchpin investment creating the ‘must do’ attraction around which other investments would work.”
RAL’s Copland adds, “The rigour of the PGF process gave the feasibility credibility when we pitched the bond to investors. Mark Dunatjschik played a critical role, providing an underwrite which allowed us to proceed with construction while we finalised the bondholder negotiations.”
The balance of the Bond offer is now fully subscribed, and investors will share in returns linked directly to visitation on the Sky Waka ensuring they benefit directly and proportionally from forecasted tourism growth over the coming decade. “We are extremely grateful for the contribution of all investors who have put their capital at risk to make Sky Waka possible, this also includes BayTrust, Māori Investments Ltd, Marotiri – Pureora Forest Hapu Cluster (FHC) Trust, Taupo and Ruapehu District Councils,” says Copland.