Fletcher raises forest cash

By CHRIS DANIELS

Fletcher Challenge Forests is one step closer to rebuying the Central North Island Forest, after securing loans of more than $1.2 billion.

Fletcher is trying to buy the 163,000ha forest and its associated sawmills from receiver Michael Stiassny for $1.3 billion.

Citic, an investment arm of the Chinese Government, is injecting $411 million into Fletcher, then becoming its largest shareholder, with a 35 per cent stake.

Citic and Fletcher owned the CNIF as part of a joint venture, but their relationship soured and the partnership went into receivership 18 months ago.

The new four-year loan facility for US$600 million has been negotiated by Fletcher with the Bank of New Zealand and HSBC, and the National Bank, ANZ, Rabobank, Citibank, Westpac and Credit Suisse.

A special meeting of shareholders, where they will be asked by the Fletcher board to vote in favour of the CNIF purchase, has been called for August 13.