27 November 2012
Fulton Hogan has got Overseas Investment Office approval to sell forestry estates in Otago to Forestry Fund 9 NZ, a subsidiary of global investment manager GMO. The conditional sale of 3013 ha of forestry land was agreed in June. Managing director Nick Miller told NBR the company was selling non-core assets, including its forestry estate and some land blocks, to bolster its balance sheet and repay debt after buying out its partner in Victoria-based Road Pioneer Services and buying back 37% of shares held by Shell New Zealand."We have divested our forestry business, which we determined is not core," he says. "We're taking advantage of a strong market in that sector and have concluded a sale."
Last year, the GMO fund bought 1149 ha near Taupo to plant pinus radiata. As a condition of the purchase, Forestry Fund 9 entered into a nitrogen management deed with Lake Taupo Protection Trust so that is has a nitrogen discharge allowance of 5 kg or less of nitrogen per hectare a year for the land for 999 years.
The pine forest is expected to meet that requirement.
Source: Story by Paul McBeth, National Business Review. To read the full story, click here.