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Strong response to sale

News Release
Nelson Forests Joint Venture
For immediate release

Strong response to Nelson Forests Joint Venture sale

NELSON, New Zealand – The Nelson Forests Joint Venture has received approaches from Australia, Asia, North America and Europe in connection with its proposed sale of one of New Zealand’s largest and highest-quality plantation forest estates.

The joint venture is owned by a subsidiary of Weyerhaeuser Company and RII New Zealand Properties 1, Inc, a timber investment fund advised by Global Forest Partners LP. The partners intend to sell the assets of the joint venture, which include planted and other productive areas totalling 68,000 hectares in the Nelson/Marlborough region.

Summary information on the estate has been distributed to interested parties, to be followed in the next few days by a full information memorandum to bidders. The sale of the assets arises from the expiry of the joint venture after a full term of 14 years.

Ranked by size, the estate is the sixth-largest radiata pine plantation in New Zealand. It also includes douglas fir and a small quantity of other merchantable wood species. The estate produces about 1.1 million cubic metres of high-quality timber per year.

The assets are:

- Approximately 77,596 gross hectares, with 60,741 hectares of Crown Forest Licences, 16,174 hectares of freehold land and 681 hectares of private joint venture leases

- A pruned log sawmill at Kaituna in Marlborough, which processes about 80,000 cubic metres annually

- A log procurement and trading operation handling 220,000 cubic metres annually.

The assets are managed by Weyerhaeuser New Zealand Inc, which is included in the assets involved in the sale process.

“The high level of initial enquiry reflects the quality of the forest,” said Gary Drobnack, vice president of Weyerhaeuser Forest Products International. “It is certainly among the best forest estates offered for sale in New Zealand in recent years.

“The forest is mature and of very high quality, with about 68 percent of the radiata having been managed in a pruned silviculture regime. The favourable growing environment in Nelson/Marlborough produces quality trees with high wood density and small knots, which in turn yield very good construction materials and appearance grade timber.”

Michael Edgar, Director of Asia Pacific Investments for Global Forest Partners LP, said: “The estate is at a sustainable level of harvest, with a rotation age exceeding 30 years. There is also flexibility to alter harvest plans to optimize sales to both domestic and international markets. In addition, the estate is well-located from a logistical perspective, close to the Nelson and Picton ports and to processing facilities.

“Importantly, the estate has strong customer relationships and a diversified customer base, with about 70 percent of the output sold to the domestic market.”

Mr Edgar said New Zealand remained an important component of a diversified international timberland investment portfolio. “The decision by the specific investor clients of GFP in the Nelson Forests Joint Venture to realise the value of their investment after a holding period of more than 14 years does not represent a change by GFP in its view of New Zealand as an attractive forestry investment location. In fact, the vast majority of our global funds and separate accounts include at least one New Zealand investment within their portfolio.”

ENDS

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