Indonesian stock info - Sino Forest signs deal to buy 266,000 hectares of forest land in China ; Sino-Forest Corporation (TSX:TRE), a Toronto company which operates commercial forest plantations in China, says some of its subsidiaries have struck deals to buy forests in Shaanxi and Yunnan provinces in China.
The deals announced Monday are with Bolin Forestry Co. Ltd. and Yuangao Forestry Development Co. Ltd., the authorized agents for the original forest rights holders.
Under the agreements, a Sino Forest unit will acquire up to 260,000 hectares of matured plantation—grown pine, fir,birch, spruce and cedar trees. The company can also lease the underlying land over a number of years.
The fibre acquisition is expected to take place over a 10-year period at a price of up to US$49 per cubic metre.
Sino-Forest chairman and CEO Allen Chan said the deal allows the company to stretch out payments over several years, giving it more financial flexibility.
"From a financial perspective, the requirement to pay 30-year lease amounts up front under the proposed new structure impacted our expected returns." Chan said in a release.
"From an operating perspective, we are committed to long-term sustainable replanting, and securing the right location for replanting is paramount for Sino-Forest to achieve attractive long-term fibre growth and yields. Therefore, we were not prepared to lock in land in new regions without having certainty about the growing conditions, which is achieved through trial replanting.
"Wood fibre is becoming an increasingly valuable commodity in China. Accordingly, Sino-Forest intends to continue to strategically expand its plantations geographically in a sustainable and economically viable manner. We also plan to increase our fibre inventory through the accelerated replanting of up to 200,000 hectares over the next two to three years."
Sino-Forest owns and manages tree plantations in China, sells standing timber and wood logs, and makes engineered-wood products.
The company also holds a majority interest in Greenheart Group Limited, a Hong Kong-listed investment company with forest operations in Suriname, South America and New Zealand.
The deals announced Monday are with Bolin Forestry Co. Ltd. and Yuangao Forestry Development Co. Ltd., the authorized agents for the original forest rights holders.
Under the agreements, a Sino Forest unit will acquire up to 260,000 hectares of matured plantation—grown pine, fir,birch, spruce and cedar trees. The company can also lease the underlying land over a number of years.
The fibre acquisition is expected to take place over a 10-year period at a price of up to US$49 per cubic metre.
Sino-Forest chairman and CEO Allen Chan said the deal allows the company to stretch out payments over several years, giving it more financial flexibility.
"From a financial perspective, the requirement to pay 30-year lease amounts up front under the proposed new structure impacted our expected returns." Chan said in a release.
"From an operating perspective, we are committed to long-term sustainable replanting, and securing the right location for replanting is paramount for Sino-Forest to achieve attractive long-term fibre growth and yields. Therefore, we were not prepared to lock in land in new regions without having certainty about the growing conditions, which is achieved through trial replanting.
"Wood fibre is becoming an increasingly valuable commodity in China. Accordingly, Sino-Forest intends to continue to strategically expand its plantations geographically in a sustainable and economically viable manner. We also plan to increase our fibre inventory through the accelerated replanting of up to 200,000 hectares over the next two to three years."
Sino-Forest owns and manages tree plantations in China, sells standing timber and wood logs, and makes engineered-wood products.
The company also holds a majority interest in Greenheart Group Limited, a Hong Kong-listed investment company with forest operations in Suriname, South America and New Zealand.
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