3 April 2012
The 11,000 hectare Mangakahia forest in Northland may be sold following the demise of the Canadian listed company Sino-Forest that filed for bankruptcy protection last week. The Toronto Stock Exchange-listed company is seeking to sell Sino-Forests' assets, which include the Mangakahia Forest through its majority stake in Hong Kong Exchange-listed Greenheart Group, after reaching a deal with about 40% of its noteholders. Sino-Forest’s creditors stand to acquire the assets if a buyer can’t be found. That may cut out shareholders in Sino-Forest, including Richard Chandler Corp, which holds about 19% of the forestry company.RCC yesterday appointed a team led by Asian forestry expert David Walker to lead its proposal in restructuring the company.
Sino-Forest hit the rocks in June after research house Muddy Waters issued a report accusing the company of overstating its earnings, leading to a sell-off in its stock that destroyed some $C3.3 billion of value. Its trading was suspended amid investigations by regulators and police and chief executive Allen Chan resigned in August.
The company last week filed a $C4 billion claim against Muddy Waters, Carson Block and others relating to the report and trading in Sino-Forest shares.
Last year, Sino-Forest sold the Mangakahia Forest, which was once owned by Carter Holt Harvey, to subsidiary Greenheart Group for $US77 million. Greenheart also owns forestry assets in Suriname. Shares in Greenheart sank 9.2% to 59 Hong Kong cents in trading on the Hong Kong exchange, valuing it at $HK506.8 million.
The New Zealand assets drove up Greenheart’s annual revenue of $HK327 million in the 2011 calendar year, compared to $HK17 million a year earlier, though its loss widened to $HK105.9 million from $HK86.6 million, according to financial statements lodged last week.
The New Zealand segment revenue accounted for about $HK300.7 million, with most of the timber sold into China.
Source: Story by Paul McBeth, National Business Review. To read the full story, click here.