Fletcher Challenge Forests Letter To Shareholders

Fletcher Forests Letter To Shareholders

Dear Shareholder

Fletcher Challenge Forests sent to you on or around 22 July 2002 a notice of special meeting and explanatory memorandum (the Notice) for the special meeting to be held on 13 August 2002 to consider the acquisition of the assets of the Central North Island Forest Partnership (CNIFP) and related transactions.

The Notice states that I am a director of The National Bank of New Zealand Limited. In the interests of full disclosure, I felt it was important that shareholders are made fully aware of the scope of The National Bank of New Zealand Limited’s involvement.

The Notice explains that The National Bank of New Zealand Limited will participate in the new debt funding arrangements proposed to fund the CNIFP acquisition. Those debt arrangements were arranged at an arm’s length and on normal commercial terms. The National Bank of New Zealand Limited is also involved as one of the senior secured lenders to the CNIFP partners and the sale proceeds for the assets of the CNIFP will be utilised by the receivers of the CNIFP partners to repay the CNIFP’s senior secured indebtedness. The National Bank of New Zealand Limited holds less than 10% of the CNIFP’s senior secured debt.

Shareholder approval for the CNIFP acquisition and related transactions is being sought, including approval as a related party transaction as a result of the involvement of The National Bank of New Zealand Limited. I have clari.ed that involvement in this letter. The shareholder approvals being sought are as set out in the Notice.

The non-interested directors, which exclude myself, Luke Moriarty and Michael Andrews, have reaffirmed their approval of the CNIFP acquisition and related transactions and the recommendation of the Board to approve those transactions as set out in the Notice. I look forward to discussing the CNIFP acquisition further with you at the special meeting.

Yours faithfully,

Sir Dryden Spring

Chairman 26 July 2002

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