Forest products giant Carter Holt Harvey has put a "for sale" sign over its 330,000ha forest estate.
Chief financial officer Jonathan Mason said Carter Holt would begin a review of its ownership of forests soon after it had completed the disposal of its $670 million-plus tissue business.
"Once a decision [on the
tissue arm] is made, will we be looking to see whether our forests are worth more to a third party? Absolutely," Mason said.
"We do not hold forest because we love forests. We want to do one thing well at a time. The tissues sale is a big decision we are making on behalf of our shareholders."
Mason said Carter Holt reviewed its assets regularly. A similar process last year precipitated the decision to sell the tissues division, which makes the popular Treasures nappies and Purex toilet paper.
His comments will be welcomed by the army of investment banks attempting to convince Carter Holt to sell its forests to the Oregon-based timber investor The Campbell Group.
Campbell - which had its $685 million bid to buy Fletcher Challenge Forests' 106,000ha estate trumped last December - is still thought to be interested in a forest investment in New Zealand.
A sale of the forest estate has been on the cards since chief executive Peter Springford took the reins at the end of 2002.
He has been looking at ways to overcome the damage wrought by the soaring dollar, rising freight and electricity costs and a flood of cheap wood from Eastern Europe and Siberia.
These factors have eroded Carter Holt's cost advantage and are expected to force it to write down the value of its forests by as much as $900 million in its annual results at the end of this month. Broker Macquarie Equities expects the charge to knock underlying annual profits from $275 million into a loss of $474 million.
Mason conceded the high New Zealand dollar could discourage interest in the tissue arm. But bidders could protect themselves from a depreciation of the kiwi by paying with New Zealand or Australian dollar debt or hedging the full sale price.
- NZPA
