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Re: Re: [sharechat] CITIC and Forests

From: "Laura and Richard" <>
Date: Tue, 20 Aug 2002 20:17:40 +1000

There were a number of reasons for my personal rejection of the ffs/citic deal.Your mention of debt management was most definitely one of them.The last three to four years of the old fletcher challenge empire was characterised by debt management.A company struggling along with little apparent strategic direction and yes,sale of many peripheral assets(at substantially lower prices than book value)in order for the company to overcome revenue problems caused by low product prices,strikes,tariffs,dumping,and all those other unfortunate events which plague commodity based industries such as ffs.ffs now has a relatively low level of debt not because of any great skill bestowed apon its management team,it is unfortunately however,more equity invested in the company by the likes of us-the shareholder.Equity which as we have seen over the last 2 to 3 years can literally disappear overnight leaving your rather meaningless debt/equity ratio in tatters.It is solid growth in cashflow from operations that interests me and at the moment ffs is not achieving this.Is buying more trees going to remedy this?Would a partnership with seawi/citic help?It may well of but there was so little information available on how it would be achieved,including a pitiful page and a half on seawi itself who was to be the cornerstone shareholder.Certainly not enough to make an informed ,intelligent investment which I would suspect is why many people did not even bother to vote.I am however fairly happy with ffs CURRENT processing and marketing strategies and believe a more courageous and innovative approach is required to grow not only ffs but the nz forestry industry as a whole.Sell to a bunch of no name merchant bankers from a company incorporated in bermuda,controlled by thanks.

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