Chips fly in failed bid to buy forest

By CHRIS DANIELS

The curious tale of the sale of the $1.5 billion Central North Island Forest Partnership has taken another twist with sniping between receiver Michael Stiassny and Fletcher Challenge Forests chief executive Terry McFadgen.

Fletcher pulled out of the running to buy the forest on Tuesday, after it failed to meet a deadline over financing the deal.

Waikato brothers Philip and Peter Vela, known in the fishing and bloodstock industries, are next in line to buy the forest.

A director of the company set up by the Velas to buy the partnership, Clive Bradbury, yesterday said Fletcher had "abandoned its bid" and "walked away from the deal".

Ferrier Hodgson receiver Michael Stiassny, who has been trying to sell the forest and associated sawmills for more than a year, contacted the Business Herald to dispute comments made by McFadgen.

Stiassny said he was concerned at the impression given by McFadgen that he as receiver had refused to grant an extension, as this had never been sought.

McFadgen yesterday accepted that he had not asked for an extension, but said this was only because Stiassny had made it clear that such a request would be rejected.

"We went in to ask for an extension," McFadgen said. "Michael said, 'No extension is possible, I've got to terminate the agreement'.

"Sure we wanted the extension. I don't know what's going on here. It's all very puzzling, very, very strange."

McFadgen said Fletcher management had been "reasonably confident of being able to put a deal together, provided we had some additional time".

He said he had a letter asking for an extension that he had hoped to give to Stiassny but was never given the chance to table it.

"I have no idea what's going on. We needed about two to three weeks, that's what we were there to ask for and he said no such extension is possible ... Can't do it.

McFadgen said Stiassny had "cut it off at the pass".

It is understood that McFadgen told Stiassny that he did not know how long it would take to put together the finance to meet the condition.

Bradbury, a Vela CNI Forests (VFL) director, said the Vela brothers were surprised that Fletcher "appeared to have abandoned its bid to buy the assets of the failed Central North Island Forest Partnership".

He said VFL might talk to Fletcher about managing the forests, but it was "just one of several large international forestry operators able to provide the skills we need in that regard".

This comment appears less enthusiastic than a previous one by Bradbury when he said Fletcher would be perfect to continue managing the forest.

Fletcher has managed the 190,000ha forest since its partnership with Chinese Government-owned Citic Forests collapsed last year amid acrimony and huge debts.

Bradbury said buying the forest was conditional on finance and due diligence.

Fletcher previously enjoyed an exclusive arrangement with Stiassny to put together a deal to buy the forest.

Stiassny said the Velas had a conditional agreement with him.

"If they meet those conditions, they get the forest."