Fletcher Challenge gets shareholder nod for forest sale

2.30pm

UPDATED REPORT - Fletcher Challenge Forests shareholders today approved the sale of most of the company's forest assets to consortium of New Zealand investors and US pension funds.

Shareholders voted on the $560 million deal in a special meeting today in Auckland.

The sale of the 100,000ha forest estates to the Kiwi consortium goes unconditional today with shareholder approval and settlement due next Friday.

FCF chairman Sir Dryden Spring said $495 million of the sale's proceeds will be returned to shareholders, beginning with a 62.5c per share payment in March, followed by a further 57.5 cents per share payment conditional on the sale of the company's remaining Tarawera forest.

FCF wants to move further into higher margin wood processing and distribution and will change its name to Tenon.

Sir Dryden said that after the capital payout, shareholders would have a "proportionate share of a much smaller marketing, distribution and processing company," with a share value of about 30-40c.

Before the vote was taken at today's meeting, Sir Dryden told shareholders the deal was not affected by legal action by Carter Holt and Norske Skog to secure their supply of wood.

"The company has made careful arrangements to ensure that Carter Holt Harvey's and Norske Skog's supply requirements will continue to be met".

The proceedings filed in the High Court yesterday sought to force FCF to keep enough forests to supply 300,000cu m of pulp wood each year to the companies.

FCF shares were unchanged at $1.33 by midday today.

- NZPA