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Placement Of Shares And Convertible Note Buy Back

Evergreen Forests announced today that it will raise $4.88 million through a placement of 9.3 million shares to Danish investors. The placement will be to two existing pension fund shareholders at 52.5 cents per share, a premium of 5% to the current market price.

Funds raised will be used to finance a pro rata offer to buy back 4.275 million of the Company's 28.5 million ten-year convertible notes. The offer to noteholders will be priced at $1.1716, being the face value of the notes in July. The price is a 7% premium to the current market price. Noteholders will be able to offer more than their pro rata entitlement, which the Company will scale back in the event of excess acceptances.

Evergreen's Chief Executive Mark Bogle said that this arrangement would strengthen the Company's balance sheet by reducing debt and lowering interest costs. This would enable the Company to gain additional flexibility in its harvest levels during a cyclical low point in export prices. It also positively supports shareholder values in the long term.

Mr Bogle stated that the combination of the share placement and note buy back would not be dilutive to existing shareholders as it reduces the eventual number of shares that will be issued to convertible note holders. The convertible notes (including the compound interest) convert to ordinary shares at 55 cents per share.

Mr Bogle advised that the offer will be mailed shortly and the Company will acquire the convertible notes within the next two months.

Evergreen is a public company listed on the New Zealand Stock Exchange and the Australian Stock Exchange. The company owns or has cutting rights over 21,000 stocked hectares (52,000 acres) planted in fast-growing radiata pine. Its forest properties are in Northland, South Auckland, the East Coast and the West Coast of the South Island.


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