Citic to quit NZ forestry

By CHRIS DANIELS

The investment arm of the Chinese Government, Citic, is leaving New Zealand after a disastrous foray into forestry ownership.

Citic has been in New Zealand since 1996, when it joined forces with Fletcher Challenge and Brierley Investments to buy Forestry Corp from the Government.

Last year the Central North Island Forest Partnership, by then owned by Fletcher Challenge Forests and Citic alone, went into receivership amid much acrimony between the partners.

A big drop in international log prices and the high price paid for the forest were blamed for sending the partnership into receivership.

In March Citic dropped out of the running to buy the forest from the receiver. It is now about to leave New Zealand altogether.

The Bloomberg news agency reports that Citic will spend several months shutting down its New Zealand operation and trying to sell some of the small forests it owns.

It quoted Citic Forests New Zealand deputy managing director Charlie Tian as saying the decision to leave was made in Beijing. Citic would continue to buy New Zealand trees, but did not need to have a base here to do that.

Hamilton brothers Philip and Peter Vela, well known in the fishing and bloodstock industries, are trying to buy the Central North Island Forest Partnership assets, thought to be worth $1.5 billion.

Fletchers withdrew from the running for the forest, after it failed to meet a financing deadline imposed by receiver Michael Stiassny.