Expecting Strong Interest In CNIFP Assets
Fletcher Challenge Forests Expects Strong Interest In CNIFP Assets
Auckland, 31 July 2001 - Fletcher Challenge Forests welcomed the advancement of the sales process for the Central North Island Forest Partnership with the announcement today of sales adviser, Morgan Stanley, by Receivers Mr Michael Stiassny and Mr Grant Graham of Ferrier Hodgson.
Chief Executive Terry McFadgen said "Fletcher Challenge Forests has a major financial stake in the Partnership as holder of the subordinated debt and we will be working with the Receivers and Morgan Stanley to ensure a successful outcome for the sales process."
"The Partnership's assets are highly attractive because of the quality of the infrastructure in the Central North Island, the maturity of the forest estate and the growth rates of Radiata pine in this area," he commented. He also noted that the estate's international environmental certification from the Forest Stewardship Council was a major positive. "This forest is one of the best in the world," he said, "and will attract global interest."
Mr McFadgen confirmed that Fletcher Challenge Forests was reviewing a number of options in relation to the sale process. "We have been approached by several parties and are exploring alternatives at this stage," he said. "These parties recognise our management capabilities, our financial interest in the estate and our leadership role in the region as both a forest owner and a major processor and marketer of wood products."
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He noted that Fletcher Challenge Forests had appointed CS First Boston as advisors to the company in relation to the sale.
Receivers were appointed to the Partnership, of which Fletcher Challenge Forests and CITIC New Zealand Limited each own 50 per cent, in March 2001. All Fletcher Challenge Forests' equity in the Partnership has been written off, and the company's remaining investment is represented exclusively by subordinated debt principal and net accrued interest of US$225 million (NZ$500 million). The investment is secured over the assets of the Partnership, ranking behind approximately US$645 million of senior bank debt.