Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Fulton Hogan gets OIO approval to sell Otago forestry

Fulton Hogan gets OIO approval to sell Otago forestry

By Paul McBeth

Nov. 26 (BusinessDesk) - Fulton Hogan has got Overseas Investment Office approval to sell forestry estates in Otago as it looks to flog off non-core assets in a bid to strengthen its balance sheet.

The Christchurch-based company sold 3,013 hectares of forestry land to Forestry Fund 9 NZ, a subsidiary of global investment manager GMO, after completing a sale and purchase agreement in June. The OIO granted approval on Oct. 18 for an undisclosed sum, according to a decision summary.

Fulton Hogan told shareholders in its annual review the contract was completed after "a lengthy period of due diligence" and was conditional on OIO approval. That sign off and settlement of the purchase price was expected in December.

Managing director Nick Miller told BusinessDesk the company was selling non-core assets, including its forestry estate and some land blocks, to bolster its balance sheet and repay debt after buying out its partner in Victoria-based Road Pioneer Services and buying back 37 percent of shares held by Shell New Zealand.

"We've done a review of non-core activities in Fulton Hogan, and in the report you will note that we have divested our forestry business, which we determined is not core," Miller said. "We're taking advantage of a strong market in that sector, and have concluded a sale."

The privately-held construction firm is also selling land that it has built up over the past 80 years, which will also go toward strengthening its books.

"We've divested some of that surplus land in NZ and certainly two or three blocks in Oz that's surplus to our needs that we intend to divest over the coming year," Miller said.

Last year, the GMO fund bought 1,149 hectares near Taupo to plant pinus radiata. As a condition of the purchase, Forestry Fund 9 entered into a nitrogen management deed with Lake Taupo Protection Trust so that is has a nitrogen discharge allowance of 5kg, or less, of nitrogen per hectare per annum for the land for 999 years. The pine forest is expected to meet that requirement.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Food: New National Science Challenge To Launch Research

What if New Zealand developed the next generation of foods that will help consumers maintain their health and protect them against diabetes, irritable bowel syndrome or chronic allergies? What if we could answer some big science questions – use that knowledge to develop foods with proven health benefits and boost our economy at the same time? More>>


Trade & Retail: Chinese Disaster Spells Quiet Season For NZ Fireworks Sales

In August, two massive explosions at a warehouse at the port in the port of Tianjin, Northern China, killing more than a hundred people and devastating large areas of the city. In the wake of the disaster, Chinese authorities rushed to regulate the distribution of all dangerous goods... More>>



Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news