Item 1
From: Stacey Wrenn <[email address]>
Sent: Tuesday, June 20, 2023 11:01:48 AM
To: Kevin Martin <[email address]>
Subject: Fwd: confirmation on financial approach
From: Marie Long <[email address]>
Sent: Monday, June 19, 2023 7:46:34 PM
To: Stacey Wrenn <[email address]>
Subject: Fwd: confirmation on financial approach
Hi Stacey
Here is the email from Treasury that gives us authorisation.
Penny would like something in writing to authorize Mike too vote tomorrow.
Thanks for organizing this.
Cheers
Marie
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From: Caralee McLiesh [TSY] <[email address]>
Sent: Monday, 19 June 2023, 6:00 pm
To: Penny Nelson <[email address]>
Cc: Marie Long <[email address]>; John Marney [TSY] <[email address]>;
Vicki Plater [TSY] <[email address]>; James Beard [TSY]
<[email address]>
Subject: confirmation on financial approach
under the Official Information Act 1982
Kia ora Penny
Thanks for your message earlier. I understand John Marney spoke to Marie Long this morning
and indicated that the Treasury was comfortable with the various amounts owed by RAL and
outlined in your e-mail on Friday being described as debts to the Crown, with DOC voting at the
watershed meeting on behalf of the Crown. I am e-mailing now to confirm that position. Under
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the Public Finance Act, the Crown includes all Ministers of the Crown and all departments, and
the chief executive of a department is responsible for the financial management and reporting of
liabilities managed by the department on behalf of the Crown. Your finance team will be best
placed to advise, but I understand that the National Parks also sit on the Crown (non-
departmental) financial schedules in DOCs financial statements. It would make sense to deal
with the 9(2)(b)(ii) already invoiced (for unpaid concession fees, user charges, and other) in
the same way, rather than separately treating that as debt owed to the DOC specifically.
If the 9(2)(b)(ii), 9(2)(j) to remove redundant infrastructure from the ski fields becomes a liability when
RAL surrenders their concessions, then we think this will need to be provisioned and expensed in
the current financial year, which will likely give rise to unappropriated expenditure. You may
wish to seek Cabinet authorisation for this (and for the expenditure to be met from imprest
supply) as that was not covered off in last week’s Cabinet paper.
My thanks to the teams in both our organisations for all the great work at pace on some complex
issues. Hope all goes well at the Watershed meeting tomorrow.
Kind regards
Caralee
Caralee McLiesh (she/her)
Te Tumu Whakarae mō Te Tai Ōhanga| Secretary and Chief Executive - The Treasury
Tel:
9(2)(a)
| Email/IM: [email address]
Visit us online at https://treasury.govt.nz/ and follow us on Twitter, LinkedIn and Instagram
The information in this email is confidential to the Treasury, intended only for the addressee(s), and may also be
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a. please immediately delete this email and notify the Treasury by return email or telephone (64 4 472 2733);
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under the Official Information Act 1982
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Stacey Wrenn <[email address]>; ^DOC: Kevin Martin <[email address]>
Subject: Fwd: RAL - Watershed meeting
Hi Caralee
Thank you for your reply, and for your team having considering DOC’s request over the last few days.
I also appreciate our phone call earlier.
I'm sending this from Dunedin on my phone after catching up with our team on RAL issues including our
CFO about the components of debt owed by RAL, and how DOC should treat these when making our
creditor claim. These components are:
· 9(2)(b)(ii) in unpaid concession fees, user charges, and other debt invoiced by, and owed to,
DOC. This component of the debt is on our books and is clearly owned by DOC.
· 9(2)(b)(ii), 9(2)(j) to remove redundant infrastructure from the ski field, that should have already been
removed by RAL. This is not currently on our books but will be come a liability when RAL
surrenders their concessions.
· Between $47 million and $88 million to remove all infrastructure from the ski fields, as required by
the make good provisions in the concessions. This is currently proposed as being treated as a
contingent liability in DOC’s 30 June 2023 financial statements. It will be recognised as a liability
once we know more details about what events may trigger the liability, including if and when the
concessions are transferred to a new operator. Cabinet has agreed that while this liability may be
recorded in DOC’s books in the future, the Crown will provided DOC with funding to cover this
liability when required and approve any required appropriation changes.
I consider the first component of the debt 9(2)(b)(ii) to be owned by DOC, and am proposing to
register this DOC’s creditor claim at the watershed meeting.
I consider the second two components of the debt to be owned by the Crown, as it not recorded as a
liability for DOC at this stage. I am proposing to register this as a Crown debt of 9(2)(b)(ii) with DOC
voting on behalf of the Crown at the watershed meeting.
Are you comfortable with this approach?
I'm keen to ensure what ever we put forward on Tuesday is supported by the Treasury.
I've also copied in key people at our end.
I will let our Minister know we are working the Treasury when I meet her before cabinet on Monday.
under the Official Information Act 1982
Happy to discuss.
Many thanks Penny
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From: Caralee McLiesh [TSY] <[email address]>
Sent: Friday, June 16, 2023 2:09:54 PM
To: Penny Nelson <[email address]>
Subject: RE: RAL - Watershed meeting r
Kia ora Penny
Thanks for your email. My teams have been discussing this with their DOC colleagues over the last couple
of days. They reviewed the advice from Duncan Cotterill on this point yesterday and our Chief Legal
Advisor has provided her assessment to me this morning.
Our view is that the Department of Conservation is the creditor in this matter.
9(2)(h)
9(2)(h)
Happy to discuss as helpful.
Ngā mihi nui
Caralee
From: Penny Nelson <[email address]>
Sent: Thursday, 15 June 2023 4:53 pm
under the Official Information Act 1982
To: Caralee McLiesh [TSY] <[email address]>
Subject: RAL - Watershed meeting r
Hi Caralee,
We are working closely with MBIE and Te Arawhiti on the RAL issue at the moment.
A question has come up about the most appropriate person to vote at the Watershed meeting next
Tuesday. My team is advising me that I should be delegating this to the Treasury given the overall liability
would be a Crown one rather than a Doc one. The context I’ve had from my teams is below.
I’d appreciate discussing with it with you.
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Thanks Penny
9(2)(b)(ii), 9(2)(i), 9(2)(j)
It is important our regulatory role is not confused with our role voting as a creditor voting at the
watershed meeting.
9(2)(b)(ii), 9(2)(i), 9(2)(j)
9(2)(b)(ii), 9(2)(i), 9(2)(j)
9(2)(h)
.
We believe it is most appropriate for Treasury to vote on behalf of DOC at the watershed meeting,
as this relates to DOC and Crown’s fiscal position. DOC will then be in a good position to make safe
regulatory decisions on the transfer of the concessions.
If RAL enters liquidation without a solution that allows the ski fields to continue operating, then the
Crown will be liable for approximately $47 million to $88 million to remove the infrastructure from
the ski fields. DOC will lose approximately 9(2)(b)(ii)per year in concession fees and contributions
to the running of Whakapapa village. There will also be a flow on effect to other concessions in the
area, increasing the fiscal risk to the Crown.
For resolutions to pass at the watershed meeting, they must meet two thresholds: 50% of the vote
by number of creditors and 75% of the vote by value of debt.
DOC’s claim at the creditor meeting is for approximately
9(2)(b)(ii)
in unpaid fees
and historic debt, and 9(2)(b)(ii), 9(2)(j)to remove redundant infrastructure from the ski fields that RAL
has failed to remove.
MBIE have also asked that we include the contingent liability (an amount between $47 million and
$88 million) in our creditor claim. We have legal advice this is a valid claim, but it creates a
significant reputational risk that we are unfairly supporting MBIE’s proposals by increasing our
voting power. Including the contingent liability would make DOC the most significant creditor at the
watershed meeting by far.
In ordinary circumstances, DOC would consider abstaining from this vote to protect our regulatory
role. However, this is not a viable option given Cabinet have agreed to support proposals put
forward at the watershed meeting.
Penny Nelson
Director-General | Tumuaki-Ahurei
Department of Conservation | Te Papa Atawhai
Conservation House Wellington | Whare Kaupapa Atawhai
18 - 32 Manners St | PO Box 10 420, Wellington 6143
under the Official Information Act 1982
T: +
9(2)(a)
EA to Penny – Sandra Griffiths [email address] ph: 9(2)(a)
Kia piki te oranga o te ao tūroa, i roto i te ngātahitanga, ki Aotearoa
To work with others to increase the value of conservation for New Zealanders
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The information in this email is confidential to the Treasury, intended only for the addressee(s), and may also be legally
privileged. If you are not an intended addressee:
a. please immediately delete this email and notify the Treasury by return email or telephone (64 4 472 2733);
b. any use, dissemination or copying of this email is strictly prohibited and may be unlawful.
Caution - This message and accompanying data may contain information that is confidential or
subject to legal privilege. If you are not the intended recipient you are notified that any use,
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Watershed meeting
Process at the watershed meeting
15. The voluntary administration process ends with the watershed meeting, where
creditors vote on the future for the company. There are three possible outcomes at a
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watershed meeting. The company may:
a. Enter a deed of company arrangement, which restructures the company;
b. Be placed into liquidation; or
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c. Be returned to the control of the directors.
16. MBIE are proposing to support a resolution that RAL is placed into liquidation. The
liquidator (in this case, the voluntary administrators would become the liquidator) will
then complete the sale of the RAL’s assets to Whakapapa Holdings and Pure Tūroa.
17. To be successful, a resolution must be accepted by:
a. 50 percent of creditors by number; and
b. 75 percent of creditors by value of debts.
18. In the event no resolution is passed, the company is returned to the control of the
directors. MBIE have advised us the directors would apply to the Courts to have RAL
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placed in liquidation, with the intention of the liquidator then completing the sale of
RAL’s assets as proposed. The timeframe for this option is unknown as this stage;
however, we understand RAL’s directors’ lawyers have sought a Court date
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immediately following the watershed meeting, in case no resolution is passed.
Additional resolution put forward
19. The Ruapehu Skifields Stakeholders Association (
RSSA) have put forward a
resolution to restructure the company to allow for their proposal for one or both of the
ski fields. This proposal was initially put forward to Kānoa through the expression of
interest process but was not progressed by Kānoa.
20. Under this proposal, life pass holders (who are also creditors) would have an
ownership stake in the restructured company. Funding would come from life pass
holders, crowd funding, and other sources.
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21. This proposal is supported by the group who put forward the fourth proposal in the
expression of interest process, which was also unsuccessful.
Details of the watershed meeting
22. The voluntary administrators formally called the watershed on 13 June 2023 and
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published their administrators’ report at this time. The watershed meeting is scheduled
for 20 June 2023 and wil be held concurrently in Whakapapa, Auckland, and
Wellington. Votes can be made in advance, in person or by proxy.
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Voting at the watershed meeting
23. We can vote as a creditor at the watershed meeting. We have one vote for the
purposes of the vote by the number of creditors. Our vote by value of debt wil be
determined by our claim as a creditor. We wil make this claim to the voluntary
administrators prior to the watershed meeting, who wil then assess whether our claim
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is valid and assign a value to it.
24. As part of our claim to the voluntary administrators, we need to demonstrate the
validity of the debt. For our claims, we need to provide the concession documents and
any documentation to quantify the debts.
25. To keep our decisions at the watershed meeting separate from our future regulatory
decisions, including decisions to transfer RAL’s concessions to the new operator/s, we
are urgently discussing with Treasury whether they could vote on our behalf.
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27. If Treasury does not agree to vote on behalf of DOC at the watershed meeting, I
recommend you do this. This wil help to manage any perceptions that we are making
decisions about the transfer of RAL’s concessions at the time we make our votes at
the watershed meeting.
28. Decisions about the transfer of concessions wil only be made after the watershed
meeting, when the outcomes of the watershed meeting are known.
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DOC’s claim as a creditor the
Value of debts owed to DOC
33. RAL currently owes us debts for:
a.
9(2)(i)
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b.
9(2)(f)(iv)
34. The unpaid concession fees and historic debt is made up of:
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s9(2)(i)
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35. Under the terms of works approvals permit ing upgrades to ski field infrastructure
including building the Sky Waka gondola, RAL was required to remove all redundant
infrastructure, for example the Waterfall Express Chair that was replaced by the Sky
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