Few bids received for huge forest

By CHRIS DANIELS FORESTRY WRITER

Just three buyers are rumoured to be standing in line for the assets of the now-defunct Central North Island Forestry Partnership.

The partnership of Fletcher Challenge Forests and the Chinese Citic group went into receivership in February, leaving 190,000ha of trees, worth around $2 billion, looking for a new owner.

But the new owners may not be so different, with one industry insider saying three serious bids had been made before last week's deadline - one from Fletcher, another from Citic and a third from a consortium dominated by Carter Holt Harvey.

Fletcher, which last month announced one of New Zealand's largest corporate losses - $749 million for the year to July - is unlikely to have enough money to buy the forest without at least one major partner.

The deadline for indicative bids was last Friday, and an announcement is expected from receiver Michael Stiassny next week.

Macquarie Equities senior investment adviser Arthur Lim said he expected a sale of the Central North Island Forest Partnership to be completed by the end of the year.

Mr Lim said it should not take too long for the sale to go through, as most of those involved in the bids would have already looked over the asset when the Government sold it in 1996.

Carter Holt has Commerce Commission approval to acquire the Central North Island Forest Partnership, as long as it divests specified forestry assets - a deal worth about $2 billion.

But this week's Court of Appeal decision in the Foodstuffs case has thrown Carter Holt's clearance into doubt.

CHH spokeswoman Bridget Abernethy said the company was "obviously interested in what happens to the asset". The commission application had been made "to keep our options open".

Beyond that, she said, there would be no comment from the company.

Market rumours this year centred on a joint bid from Fletcher Challenge Forests and CHH.

Fletcher Forests said in July that it was talking to several parties with a view to bidding for the asset, but it would not say who the parties were.

Wayne Coffey, executive director of the Timber Industry Federation, said he did not care who ended up buying the huge forest asset.

"We just don't want a repeat of the incompetence that has been demonstrated over the past five years."