Tuesday 3rd April 2012 |
Text too small? |
About 11,000 hectares of Northland forestry may be end up on the block as Sino-Forest, which owns the block through a Hong Kong investment vehicle, seeks a buyer for its assets after filing for bankruptcy protection last week.
The Toronto Stock Exchange-listed company is seeking to sell its assets, which include the Mangakahia Forest through its majority stake in Hong Kong Exchange-listed Greenheart Group, after reaching a deal with about 40 percent of its noteholders.
Sino Forest’s creditors stand to acquire the assets if a buyer can’t be found. That may cut out shareholders in Sino-Forest, including Richard Chandler Corp which holds about 19 percent of the forestry company.
RCC yesterday appointed a team led by Asian forestry expert David Walker to lead its proposal in restructuring the company. The investment vehicle of New Zealand-born billionaire Richard Chandler said Sino-Forest’s business and financial resources have deteriorated in recent months due to the lack of a “credible business plan”.
“A successful restructuring which builds a long-term sustainable plantation business will take a considerable amount of time and a strong team to drive the process,” Walker said in a statement. “We look forward to working with the company and its bondholders to implement a plan which builds long-term value for all Sino-Forest stakeholders.”
Sino-Forest hit the rocks in June after research house Muddy Waters issued a report accusing the company of overstating its earnings, leading to a sell-off in its stock that destroyed some C$3.3 billion of value.
Its trading was suspended amid investigations by regulators and police and chief executive Allen Chan resigned in August. The company last week filed a C$4 billion claim against Muddy Waters, Carson Block and others relating to the report and trading in Sino-Forest shares.
Last year, Sino-Forest sold the Mangakahia Forest, which was once owned by Carter Holt Harvey, to subsidiary Greenheart Group for US$77 million. Greenheart also owns forestry assets in Suriname.
In response to the Sino-Forest announcement, Greenheart said it was too early to speculate on the outcome of the Sino-Forest sale or restructure. Shares in Greenheart sank 9.2 percent to 59 Hong Kong cents in trading on the Hong Kong exchange, valuing it at HK$506.8 million.
The New Zealand assets drove up Greenheart’s annual revenue of HK$327 million in the 2011 calendar year, compared to HK$17 million a year earlier, though its loss widened to HK$105.9 million from HK$86.6 million, according to financial statements lodged last week. The New Zealand segment revenue accounted for about HK$300.7 million, with most of the timber sold into China.
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes