Fletcher finds way to keep New York listing

By CHRIS DANIELS forestry writer

Breaching the rules of the New York Stock Exchange has pushed Fletcher Challenge Forests into launching a share consolidation.

The exchange told Fletcher that it breached listing rules this year when the price of its American Depositary Receipts (ADRs) did not stay above the US$1 minimum over a consecutive 30 days.

The receipts are similar to shares, but are used by non-US companies.

Fletcher told the New Zealand Stock Exchange that a consolidation of shares would address the issue.

"The company is required to satisfy the New York Stock Exchange that further breaches of the listing criteria will not occur in the future and that the current ADR price will remain over $1."

The exact ratio of the share consolidation has not been decided, although the the Fletcher board has said the current 10 to one ratio of Fletcher shares to ADRs will continue. The company currently has 2.8 billion shares issued.

Chairman Dryden Spring said Fletcher had a "large and loyal" shareholder following in the US, and the consolidation would support its continued presence in the market.

Implementation of the consolidation needs to be approved at the next annual shareholders meeting, due in November.

Company secretary Paul Gillard said the New York exchange did not mind if the ADR remained below US$1 while the consolidation was being arranged.

He said the ADR price had been hovering around US$1 this year, but had dropped below 98USc when the company withdrew from the sales process of the Central North Island Forest Partnership.

Fletcher was bidding for the huge forest estate of the the partnership, which is in receivership, but pulled out when it could not meet a financing deadline imposed by the receiver.