FFS likely to keep role in NI forests

By Phil Boeyen, ShareChat Business News Editor

Tuesday 31st July 2001

Fletcher Forests (NZSE: FFS) is hinting it will continue to play a part in the Central North Island Forests which are currently up for grabs as part of a receivership sale.

Forests' CEO Terry McFadgen says the company is reviewing a number of options in relation to the sale process.

"We have been approached by several parties and are exploring alternatives at this stage.

"These parties recognise our management capabilities, our financial interest in the estate and our leadership role in the region as both a forest owner and a major processor and marketer of wood products."

CS First Boston has been appointed as advisors to FFS in relation to the sale.

Mr McFadgen says the company welcomes the advancement of the sales process for the Central North Island Forest Partnership with the announcement today of sales adviser, Morgan Stanley, by the receivers.

"Fletcher Challenge Forests has a major financial stake in the partnership as holder of the subordinated debt and we will be working with the receivers and Morgan Stanley to ensure a successful outcome for the sales process."

Mr McFadgen says the partnership's assets are highly attractive because of the quality of the infrastructure in the Central North Island, the maturity of the forest estate and the growth rates of radiata pine in the area.

"This forest is one of the best in the world and will attract global interest."

Receivers were appointed to the partnership in May, in which both Fletcher Challenge Forests and Chinese-owned CITIC New Zealand have a 50% share.

FFS has written off all its equity but retains an investment via US$225 million of subordinated debt principal and net accrued interest, which is secured over the assets of the partnership and ranks behind some US$645 million of senior bank debt.

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