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Fletcher Challenge Welcomes Norske Vote

Fletcher Challenge Welcomes Norske Vote, Confirms Group Restructuring Process and Timetable

AUCKLAND, 4 May 2000 –The Chairman of Fletcher Challenge, Dr Roderick Deane, today welcomed the approval of the Fletcher Challenge Paper purchase by Norske Skog’s Corporate Assembly. “We are very pleased with the positive outcome. The Assembly’s agreement means we are on track with a timetable which should see the Fletcher Challenge shareholder vote in early July, with court approval and transaction closing by the end of July.

“While our immediate priority is completing the Paper transaction, at the same time we are exploring a full range of options for value maximisation in Building, Energy and Forests. For the separation of these three Divisions we have adopted the same process to ensure we are achieving full value as we have in the Paper transaction.

“As part of this process Fletcher Challenge has engaged external advisers to assist Corporate and divisional management in assessing all options. Energy is working with Morgan Stanley, with which it has had an association for some time, Building has appointed Credit Suisse First Boston and Fletcher Forests is using Merrill Lynch. It is important to note, however, that while the process may be the same, the outcomes could be different for each Division,” Dr Deane said.

“In analysing the options we are benchmarking against a ‘stand-alone’ base case. The Board has no pre-determined view of the outcomes in Building, Energy and Forests. Value maximisation for shareholders will be the key driver.”



Dr Deane said that in the meantime each Division would continue to be managed for value. “This could well include portfolio changes being made – both acquisitions and divestments – as long as they were consistent with value-maximisation. Re-capitalisation where necessary as part of the separation process would also be effected,” he said.

“It is important to note that the Board has nothing imminent to announce in relation to the overall futures of Building, Energy or Forests. Indeed it may be some time before we make further progress, but we are committed to our target of December 2000 for the completion of the Group Restructuring. We will of course inform shareholders as soon as we have anything substantive to announce.”

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