Fletcher Forests to buy NI assets

By Phil Boeyen, ShareChat Business News Editor

Thursday 28th March 2002

Fletcher Challenge Forests (NZSE: FFS) will go it alone in buying the assets of the Central North Island Forestry Partnership.

The announcement comes just over a year after the partnership was place in receivership following a breach of loan ratios and convenants in relation to bank debt.

At the end of last year FCF confirmed it had submitted a proposal to Morgan Stanley for the partnership's assets and said at the time that the proposal involved a third party.

However the announcement today says the company "will progress, on an exclusive basis, a proposed acquisition of the assets of the CNIFP."

"The contract for the proposed acquisition is subject to a number of conditions to be satisfied within the next five weeks including financing satisfactory to FCF.

"The proposed purchase will also subsequently require FCF shareholder approval at a special meeting called for that purpose."

At this stage no further conditions on the proposal have been disclosed, including the price to be paid, and FCF says it has been granted a temporary waiver regarding the release of information.

The waiver has been granted "on the basis that FCF will make a further announcement setting out all the details required by Listing Rule 10.7.4 once the key conditions to the proposed acquisition have been satisfied."

However the company says that it "welcomes this opportunity to finalise a proposal to acquire this strategic asset."

Fletcher Forests wrote down its investment in the CNIFP by $768 million before tax in its fiscal 2001 result and wrote off the balance of the subordinated loan of $349 million in the six months ended December 2001.

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