FORESTRY COMPANIES

Dominion, Volume 31, Issue 287, 31 August 1938, Page 6

FORESTRY COMPANIES

Incorporation Commission Approves Agreement SEQUEL TO LONG INQUIRY By Telegraph—Press Association. Auckland, August 30. After months of inquiry, the Bondholders’ Incorporation Commission, comprising Messrs. J. S. Barton (chairman), N. A. Duthie and J. B. Henry, to-day formally approved, by way of order, of an agreement between New Zealand Perpetual Forests Limited and New Zealand Forests Products Limited by which the last-named company relieved the other of obligation to maintain its forests for the balance of the maintenance period of about 20 years In return New Zealand Perpetual Forests Limited agreed to make transfer bv way of cash and investments of a sum of about £1,300,000 to Forests Products Limited. In the course of the inquiry much expert evidence was heard, mostly from Australia, and it was after this evidence was heard that the agreement was made. More than 70,000 former bondholders in New Zealand Perpetual Forests Limited are now incorporated as shareholders in New Zealand Forests Products Limited, which was formed for this purpose. _ New Zealand Forests Products Limited will soon obtain legal possession of forests controlled by New Zealand Perpetual Forests Limited, but this is altogether independent of the proceedings to-day, the sum agreed upon really representing the equivalent of a maintenance and renewals fund. The chairman referred to the value of evidence taken, and said it had been more than apparent to members of the commission that without the formulating, tendering and testing of that evidence the parties never could have reached the agreement they had arrived at. An explanation of the proceedings was given by counsel, who said that New Zealand Forest Products Limited had been formed at the end of 1935 with a capital of £11,000,000. Some of the trees in the earlier planting of New Zealand Perpetual Forests Limited were now from 12 to 14 years old, and the forestry experts of the company were advised that preliminary plans for realisation should be undertaken as early as possible. Such plans depended on the completion of the agreement. Under the terms of the original contract New Zealand Perpetual Forests Limited was entitled to retain possession of forests during the maintenance period. This contract envisaged a maintenance period of 20 years, but there was provision for bondholders taking over forests for realisation at an earlier date.