Forests secures $US600 mln loan facility

By NZPA

Monday 15th July 2002

Fletcher Challenge Forests said today it has secured $US600 million ($NZ1.3 billion) in new bank loans to fund the purchase of the Central North Island (CNI) forest estate.

Forests plans to buy the 163,000 ha estate in partnership with Chinese-government owned Citic for $US650 million.

Under the deal Citic, through subsidiary South East Asia Wood Industries (Seawi), will pay $US200 million for a 35 percent stake in Forests.

The new four-year facility has been arranged by the Bank of New Zealand and HSBC, with participation by National Bank of New Zealand, ANZ, Rabobank, Citibank, Westpac and Credit Suisse.

It will replace the Forests' existing facilities as well as provide the debt funding required for the purchase.

"The new facility offers greater flexibility than the company's existing arrangements, at lower cost," Forests chief executive Terry McFadgen said.

Shareholders will vote on the CNI purchase on August 13 and a report on the purchase, by independent consultants Grant Samuel & Associates, will be sent to shareholders next week.

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