Chinese drop bid for CNIFP

By PAM GRAHAM

The Chinese are about to withdraw from pursuit of the central North Island forests.

The 162,000ha Central North Island Forest Partnership (CNIFP) estate was put into receivership two years ago.

It is for sale for US$650 million ($1.1 billion) - the bank debt owed to 12 lenders.

There has been speculation that money managers for Harvard University had put in a low bid and that Citic (China International Trust and Investment Corp) had been active again.

Citic was a previous owner with Fletcher Challenge and it failed to get a joint bid with its former partner accepted last year.

The Herald understands the Chinese sought the right to negotiate exclusively last week.

It was not granted, precipitating a decision to withdraw, which will be formally notified shortly.

Receiver Michael Stiassny, of Ferrier Hodgson, declined to comment.

A question-mark over the Chinese plan has been whether funding was in place, particularly the debt component, which would be sourced from the same lenders who financed the collapsed structure.

It is understood that one bank, HSBC, did not want to be involved in the new financing and that others felt it should bear a cost for not participating.

Decisions by the syndicate of lenders to CNIFP must be unanimous. Because of that, an attempt to replace the receiver did not get through.

The CNIFP estate could be worth as little as US$500 million based on a comparison with the proposed sale of the neighbouring Fletcher estate, some bankers believe. But Fletcher's forests are freehold and the CNIFP assets are the right to harvest on land subject to Waitangi Tribunal claims.