RealNZ tourism business attracts millions in capital raise as borders reopen

Privately-owned tourism business RealNZ has attracted high-profile backing, raising "tens of millions of dollars" in what it bills as one of the largest private capital raises in the industry.

Investors including Milford Asset Management, Xero founder Rod Drury, Forsyth Barr's Jonty Edgar, Mitre 10 stores owner Martin Dippie, and cashed-up Sistema founder Brendan Lindsay have invested in the company.

It was founded by Les and Olive Hutchins 70 years ago. The family, who have also invested in this equity raise, will retain a majority shareholding in the business which, after two years largely without international tourists, is gearing up for their return.

RealNZ's experiences include TSS Earnslaw, Walter Peak Farm, Te Anau Glow Worm Caves, Queenstown Jet, International Antarctic Centre, Cardrona Alpine Resort, Treble Cone Ski Area, Doubtful Sound and Milford Sound cruises as well as excursions in Southern Fiordland and Rakiura-Stewart Island.

Chief executive Stephen England-Hall said the process of bringing the group of investors together had been going on for some time and the funds would be used to shore up the balance sheet and provide capital for investing in technology, innovation and sustainability.

"Those things require resources and so does making sure our sales and marketing and broader capability is ready to rock and roll for the return of international travel," he said.

RealNZ would consider buying new businesses.

Investors were chosen based on their connection to the regions RealNZ operates in, as well as their key areas of knowledge.

Milford Asset Management is investing through one of its private equity funds and will be the largest shareholder behind the family.

Milford's John Johnston said the firm was "delighted to support a business that has iconic assets and great people, and that we believe has a bright future as it navigates out of the Covid pandemic".

Stephen England-Hall was head of Tourism NZ before the RealNZ job. Photo / Stephen England-Hall

RealNZ said Drury's commitment to investment in the South, as well as his expertise in technology, made him a natural fit for a business in the midst of a digital transformation.

Dippie brings property and extensive retail knowledge, including as chair of the Mitre 10 group.

"Brendan Lindsay's business acumen from investments in a number of areas of the New Zealand economy, and Jonty Edgar's capital markets expertise, will also bring immensely valuable capabilities to the shareholder base."

The board will be re-vamped.

Departing chair Jim Boult said following the appointment of England-Hall as chief executive the 12 months had been a period of significant change for RealNZ, with a fresh strategy, group-wide reorganisation and rebranding.

England-Hall said the company wanted to be in a good position to drive the recovery of tourism, not just be in recovery.

Border rules are relaxed just before Easter to allow vaccinated Australians to enter the country without MIQ or self-isolation, and in early May many other long-haul visitors can return under the same rules.

England-Hall said the bookings were not pouring in but were increasing steadily each day. There was interest from South East Asia and North America in addition to Australia.

''There's a bit of caution around what governments will do around border settings — are we permanently open or not. There's a bit of nervousness around that.''