US company buys Tarawera forest cutting rights

By PAM GRAHAM

The right to harvest the Tarawera forest, a jewel in the old Fletcher Challenge Forests' crown, has been sold to United States timberland investor Hancock Natural Resource Group for $165 million.

Tarawera was Fletcher's last forestry asset, after the sale of the bulk of its estates to a consortium of New Zealand and foreign investors for $560 million in February.

The deal brings another large US player to the central North Island and means shareholders in Tenon, the renamed Fletcher Challenge Forests, are likely to get a total $1.20 a share from the company's exit from forest ownership.

Hancock is buying the right to cut one rotation from the 20,700ha Tarawera estate and is also buying cutting rights to about 40,000ha from Kiwi Forests, part of the consortium that bought Fletcher's forests two months ago.

It is Hancock's first purchase in New Zealand and it joins Harvard Management Co, Prudential Timber Investments and Ontario Teachers' Plan in the central North Island.

Kiwi - a consortium owned by Auckland property investors Trevor Farmer, Ross Green, Mark Wyborn and Adrian Burr - is believed to now own only 71,000ha of freehold land from the old Fletcher estate.

Tenon has also settled a lawsuit taken by Carter Holt Harvey and Norske Skog over wood supply.

The sale is conditional on Overseas Investment Commission approval, funding and approval of Tenon shareholders should stock exchanges require it.

"The sale of Tarawera and the resolution of the dispute with Carter Holt Harvey and Norske Skog Tasman is the last major step of a programme to sell the forest assets," said chief executive John Dell.

The company was still targeting a total $1.20 a share payment to shareholders. A part-payment was made this week. The rest is subject to approval from leaseholders, expected to take up to six months, and getting $165 million for Tarawera.

Tarawera borders the 162,000ha Central North Island Forest Partnership estate, now known as Kaingaroa Timberland, bought by Harvard.

Carter Holt, still New Zealand's largest forest owner, is expected to talk more about its approach to forest ownership later in the year.