Evergreen seeks advice as it looks into asset sales

Listed forest owner Evergreen Forests has brought in investment bankers to advise it on options for asset sales and a possible recapitalisation.

The company told the stock exchange yesterday that it had called on Forsyth Barr in a bid to strengthen its financial position.

Chairman Peter Wilson said debt had been reduced since June 2004 and costs had been cut, but that had not been enough.

The Evergreen board planned to meet Forsyth Barr advisers next month and report to its shareholders on progress in mid-March, with the publication of its interim report and half-year results.

On December 22, Evergreen told the stock exchange an independent valuation had estimated the value of its forests had dropped by $14.6 million in the previous six months.

Valuers had revised downwards the values to reflect market conditions and long-term prices for export grades had also been revised down.

This was the third valuation reduction in the past two years and reflected the continued impact of competitive markets, the strong dollar and high shipping costs.

Last year, Wilson said the company might be forced to consider alternative uses for its land if these two factors continued to make log exports unprofitable.

The booming Chinese economy had increased global demand for commodities, but this had raised the cost of shipping.

New Zealand's pinus radiata wood is unpopular with builders in China.