Velas backup for big forestry deal

By CHRIS DANIELS

Hamilton brothers Philip and Peter Vela have been named as the back-up investors to buy the assets of the failed Central North Island Forest Partnership.

Fletcher Challenge Forests is trying to put together a bid to buy the 190,000ha forest and associated mills.

The receiver for the partnership, Michael Stiassny, could be asking as much as $1.5 billion for the assets.

This week he said a "back-up deal" had been worked out with another interested buyer, should the Fletcher plan fail.

Many industry commentators had assumed any such "Plan B" buyer would be a huge forestry concern, such as the Chinese former part-owner Citic, US forestry investment giant Hancock, or local industry giant Carter Holt Harvey.

But yesterday the anonymous suitor was unveiled as the Vela brothers, known mainly for their involvement in the bloodstock and fishing industries.

The Velas' CNI Forests director, Auckland lawyer Clive Bradbury, said the assets of the CNIFP would be a good strategic fit with the Velas' bloodstock, farming and forestry investments.

The Velas, who are both in Europe, already own 3000ha to 4000ha of forest in small holdings around New Zealand.

"Our interests in the CNIFP assets is directly related to our optimism over the future economic outlook for New Zealand," said Bradbury.

He said the Velas were approached by Stiassny through merchant bank Morgan Stanley.

"They were asked to look at this by the receiver as an investment. They would look to appoint an experienced forestry manager with international forestry experience to run the operation."

Fletcher, which manages the forest, would be ideal to continue running it, should the Velas buy it, said Bradbury.

While it was possible that other forestry investors could be approached to invest in the CNIFP, at this stage it was purely the Velas and their interests putting together any bid.

"The company would remain under New Zealand control with the Velas at the helm," he said.

"They are not standing in for anyone else, they are looking at this as a long-term investment, not a short-term hold.

"We've been there for the last three and a bit months, working hard on it.

"We were disappointed when we weren't the preferred bidder, but that's life."

Philip and Peter Vela's father, Filip, arrived in New Zealand in 1929, after emigrating from the Dalmatian coast.

He founded fishing companies, which his sons took over and developed into one of New Zealand's largest privately owned fishing companies, Vela Fishing.

The Velas own last year's Melbourne Cup winner, Ethereal, which was recently retired from racing after winning $5.75 million in her racing career.

Peter is the chairman of New Zealand Bloodstock, which the brothers jointly own. New Zealand Bloodstock runs the annual yearling sales at Karaka.

Their wealth was estimated to be $50 million by the National Business Review Rich List in 2000.