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Fletcher Challenge Rejects CITIC’s Offer


Fletcher Challenge Rejects CITIC’s Offer

AUCKLAND, 1 November 2000 – Fletcher Challenge Limited today confirmed that it had rejected an offer made by CITIC in September to buy Fletcher Challenge Forests out of the Central North Island Forestry Partnership.

Mr Terry McFadgen, the Chief Executive of Fletcher Challenge Forests said, “CITIC’s net offer of $218 million for Fletcher Forests’ entire equity and secured debt position is significantly below fair value for our interest. In addition, the offer included a deduction of over $100 million for alleged claims against Fletcher Challenge Forests, all of which we believe to be substantially baseless.”

“Fletcher Challenge Forests is not prepared to sell its assets at values based on current low log prices. Subject to shareholder approval at the Company’s Annual Shareholders meeting tomorrow, we will proceed as planned with the Forests Division’s recapitalisation by way of a rights issue. This will ensure that shareholders do not lose the potential upside in value that may emerge overtime, rather than see this value transferred to others,” he said.

Fletcher Challenge Forests also noted, and expressed disappointment that, offers to proceed to immediate arbitration of CITIC’s claims have to date been rejected.

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