High Court says Fletcher Challenge needs shareholder approval to sell forests

11.39am


Fletcher Challenge Forests (FCF) will have to seek shareholder approval if its directors want to sell forest assets owned by its subsidiaries, the High Court in Auckland says.

The court has found that a proposed sale of forest assets must be approved by an ordinary resolution (a simple majority of those shareholders that vote), FCF said in a statement today.

The company's board acknowledged the "reasonableness" of the view that a major transaction needed "the higher threshold of a special resolution."

FCF is currently trying to sell its 106,000ha forest estate, and recently agreed to pay one bidder $8.5 million to break an exclusivity deal and open talks with a local consortium.

Kiwi Forests Group, is offering $725 million for Fletcher's estate, while United States timber management company The Campbell Group which has offered $685 million for the forests released Fletchers from an agreement to exclusively negotiate with it.

An issue of importance to Fletchers is securing wood supply for the processing businesses it will be left with.

At 10am, Fletcher Challenge Forests shares were up 1c at $1.33, having traded between 94 cents and $1.34.

- NZPA