New Forests Reaches Agreement to Acquire 175,000 hectare Tasmanian Plantation Estate

04/2014

Sydney, 29 April 2014: Australia-based fund manager New Forests today announced that it has reached agreement to acquire Tasmanian land and forestry assets from Gunns Limited (Receivers and Managers Appointed)(In Liquidation). The transaction will include approximately 100,000 hectares of timber plantations, in addition to two woodchip mills, the Somerset nursery, and a timber fibre technology laboratory at Ridgley. The transaction does not include the permits or land associated with the Tamar Valley pulp mill project.

The transaction is set to complete by 30 June 2014 or shortly thereafter. A new management company will be formed to manage the forestry portfolio and will employ existing Gunns Limited forestry staff. The management company will also take on future rights and obligations under existing contracts.

“We are enthusiastic about expanding our plantation forestry investment base in Tasmania,” said New Forests’ CEO David Brand. “We recognize that the industry has been through a difficult period with the high Australian dollar, failure of the MIS business model, and restructure of the hardwood woodchip markets in Asia. However, we believe that the industry is now recovering and has a bright future. As an investor we want to be a positive force in the community, create an environment of stability where local business can gain confidence, and look to opportunities for innovation and business development. We also want to be part of the consensus around sustainable forestry, and will seek third party certification of all our operations.”

The plantations are spread across Tasmania, with a primary concentration of freehold land and plantations around the northwest of the state. More than 175,000 hectares of freehold land will be acquired, and the plantation base includes mostly Eucalyptus nitens with smaller amounts of Eucalyptus globulus and Pinus radiata.

The acquisition will bring New Forests’ forestry estate to more than 500,000 hectares of plantation land and trees in Australia as well as the Timberlink Australia Pty Ltd sawmilling, sales, and distribution business. The company is a leading timberland investment manager focused on the Asia-Pacific region and specialises in sustainable forest management and environmental markets.

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