Receiver puts East Coast forest back on the market

By PAM GRAHAM

The formal sale process of the largest and most economically important forest in the East Coast region has started.

The 33,000ha estate Huaguang Forests of China bought from Rayonier in 2002 for US$63.5 million ($89.7 million) has been put back on the market by Huaguang receiver Ferrier Hodgson.

Rayonier, which sold after an unsolicited approach from Huaguang, was interested in looking at the information memorandum, managing director James Everett said.

Brendan Gibson of Ferrier Hodgson said the estate, which is on Crown and privately leased land, was continuing to trade as a going concern and Gisborne staff remained with the company.

It would be marketed in New Zealand and overseas and good interest had already been received.

The estate is producing 380,000 tonnes a year and within 10 years the sustainable cut will be in excess of 700,000 tonnes. Industry observers said trees grew quickly on the East Coast, giving high yields to investors, but harvesting costs were higher because of steep terrain and poor infrastructure.

Some infrastructure, such as logging crews, has been lost as Huaguang struggled.