Plan for Maori to buy assets

By VERNON SMALL and PAM GRAHAM

Preliminary negotiations are under way on a three-pronged deal for Maori and private interests to buy the assets of the failed Central North Island Forestry Partnership.

Wellington merchant banking sources said proposals had been mooted "some time ago", although the kidnapping of key Maori lawyer Donna Hall's child and the early election had slowed progress.

Maori Affairs Minister Parekura Horomia and Finance Minister Michael Cullen were aware of the plan.

It hinged on a settlement of the Treaty of Waitangi claims over the land under the trees, including the giant Kaingaroa forest.

The proposal would likely bring together a treaty settlement over the land, worth up to $240 million, and cash from the Crown Forestry Rental Trust.

The trust holds about $160 million in rents relating to the forest land on behalf of claimants.

That $400 million could be matched by an investor such as listed Guinness Peat Group or Fletcher Forests, or US investor Hancock Timber Resources Group in a joint venture.

The two would then have about $600 million in cash which could be used, possibly in combination with debt funding from the banks which put CNIFP in receivership, to fund the US$650 million ($1.3 billion) price tag on the partnership.

The joint venture would then hold the land and the cutting rights to the forest in a single company.

One investment source said an end to the "adversarial relationship" between the land owners and the tree-owners could enhance returns.

"At the moment the tree-owners are looking to screw down the rent price and the land owners are looking to screw up the share of the tree profit."

GPG director Tony Gibbs yesterday confirmed he had held talks with Maori leaders. He declined to name them.

"I've said it would be an appropriate role for GPG to pull it together if it was possible and we're talking with the receiver [Michael Stiassny]."

Maori claimants and Treaty Negotiations Minister Margaret Wilson will meet tomorrow, but her office was yesterday downplaying the talks as "business as usual".

But both sides stressed the focus was on a land deal.

Wilson said the Government was keen to make progress on settlements over Crown forest land.

"The Government has received a number of proposals for doing this and is always open to exploring new ways to achieve settlements at a faster rate.

"However, we need to ensure that we do not disturb the integrity of the current settlement process or disrupt the good progress being made under that process."

Donna Hall said central North Island Maori were also keen to settle.

"Let's just keep it simple. What is important is that the Crown is willing to consider discussions and the claimants are very concerned to further those discussions."

At this stage it may "confuse matters" to discuss buying trees.

More than 120,000 people were affected by the claim.