• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Dunedin City Forests to End Fund

Posted on: Tuesday, 29 November 2005, 15:00 CST

By GORMAN, Paul

THE Opio Forestry Fund's major unitholder, Dunedin's City Forests, wants to kill off the fund and buy its Otago and Southland assets.

The Dunedin City Council-owned forestry company owns and manages more than 15,000 hectares of forests in the region and holds 74.6 per cent of Opio's units.

City Forests has requested a meeting of unit-holders early next year to discuss the public sale of Opio's 1360ha of forest for the highest price above $13,416,380 -- the most recent valuation of the fund's trees and land.

Chief executive Phil Taylor told BusinessDay that City Forests was unconvinced of the usefulness of the fund. "We don't see that the fund as a listed trust is a sensible way for anyone to invest in forestry. It's an inefficient mechanism."

City Forests had been considering a sale of Opio since it became the majority unitholder last year. "To be fair, it has always been in our minds that we were wanting to do it. (We) decided we need to control and own the assets."

The company would bid competitively for Opio's forests, Mr Taylor said.

City Forests' intention would be to terminate the fund as soon as possible after any sale, he said.

Perpetual Trust chief executive Peter Baynes said any party with more than 20 per cent of the units was entitled to call a unit- holder meeting.

The meeting was likely to be held in early February and Perpetual Trust, as Opio's trustee, would be sending full information on City Forests' resolutions to unit-holders before Christmas.

Last week, Opio reported a $405,000 interim net profit, against a $349,000 loss in the same September half of 2004. Turnover rose 7.8 per cent to $111,000, while the value of its Otago and Southland forests rose 6.6 per cent to $10.214 million.

Source: Dominion Post

More News in this Category