Fletcher Forests ran out of time for CNIFP bid

By Phil Boeyen, ShareChat Business News Editor

Friday 26th April 2002

Fletcher Challenge Forests (NZSE: FFS) says it is likely that it would have been able to finance the $1.5 billion purchase of the Central North Island Forestry Partnership assets if it had had more time to put a deal together.

The company was responding to a market enquiry about why it pulled its offer for the assets earlier this week.

"Key to the ability to raise finance was the need to reach agreement with a partner to fund part of the purchase," says FCF boss Terry McFadgen.

"We had a transaction which had a number of conditions in it, and we were unable to meet the timetable for the first of those conditions, being finance.

"We were comfortable that with additional time it was likely that we would do so, but the receivers advised that they were unable to consider an extension of time".

Mr McFadgen says the receivers terminated the agreement on the grounds that the financing condition had not been satisfied by its due date.

Fletcher Forests has also confirmed that the consideration payable for the assets of the Central North Island Forest Partnership had been agreed with the receivers at the amount of debt owed to the partnership's banks of approximately NZ$1.5 billion.

Reuters reported Friday that a back-up agreement for the assets by New Zealand investment company Vela CNI Forests (VFL) was conditional on finance and due diligence.

The agency quoted VFL as being on track with its funding arrangements, which include a term loan facility to be underwritten by Westpac Banking Corporation.

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