Hart’s Carter Holt netted $US38.6m in forestry sale last year

BUSINESSDESK: Carter Holt Harvey, which reportedly refinanced $1.45 billion of debt last year, sold forestry assets near Tokoroa for some $US38.6 million, says the purchasing company’s financial statements.

Te Waihou Plantations, a subsidiary of GTI 9 Investment Acquisition Co which is managed by US-based Global Forest Partners, bought $US38.6m of forestry assets in the 14 months ended December 31, according to statements filed with the Companies Office.

The company was incorporated on November 15, 2010, and had no forest assets at the start of its balance date.

During that period, it bought some 17,300ha of land, made up of 18 blocks near Tokoroa, from Carter Holt Harvey HBU for an undisclosed sum.

Te Waihou will acquire the land progressively as the existing trees were harvested under forestry rights held by a third party, according to the Overseas Investment Office consent for the purchase in February last year.

Carter Holt is owned by New Zealand’s richest man, Graeme Hart.

As part of the deal, Te Waihou can enforce the mandatory surrender of forestry rights with no purchase cost attached, and it reported a $US21.1m fair-value gain from acquiring rights during the period.

As at December 31, its forest assets had a fair value of $US60.1m.

It also recorded a $US2m fair-value gain on capital roading, which was included in the purchase price.

Te Waihou took a $US1.4m impairment charge on the value of its carbon credits after the carrying amount was reduced to a recoverable amount of $US12 per New Zealand unit.

The net book value ended the period at $US2.1m.

The company owns pre-1990s forest land, and said it has no plans for deforestation.

The unrealised movements in fair value meant the company made a bottom-line profit of $US25.6m, though it hadn’t reported any sales in the period.

In April last year, the parent company injected $US25.3m into Te Waihou.

The New Zealand Superannuation Fund uses Global Forest Partners as one of its timber asset managers, and New Zealand investors hold 4.4% of Te Waihou, according to the OIO decision summary.

Carter Holt Harvey had to tap lenders to refinance its term debt last year after failing to find buyers for its pulp, paper and packaging assets at an acceptable price, Reuters reported in August last year.