FORESTRY DEAL

New Zealand Herald, Volume LXXV, Issue 23130, 31 August 1938, Page 16

FORESTRY DEAL

SUM OF £1,300,000 MAINTENANCE OF AREAS OBLIGATION TRANSFERRED COMMISSION'S APPROYAL -5 After months of inquiry, the Bondholders Incorporation Commission, comprising Messrs. J. S. Barton (chairjr.nn), rs. A. Duthio and J. B. Henry. tp .terday formally approved by way of order of an agreement between New Zealand Perpetual Forests, Limited, and Nc.v Zealand Forests Products. Limited, by which the last-named company relieved tho other of the obligation to maintain its forests for the balance of the maintenance period of about 20 years. Tn return, New Zealand Perpetual Forests, Limited, agreed to transfer by way of cash and investments the sum of about £1,300,000 to New Zealand Forests Products, Limited.

In the course of the inquiry much expert evidence was heard, mostly from Australia, and it was after this evidence was taken that the agreement was made.. Over 70,000 former bondholders in New Zealand Perpetual Forests, Limited, are now'incorporated ns shareholders in New Zpaland Forests Products, Limited, which was formed for this purpose. Xew Zealand Forests Products, Limited, will soon obtain legal possession of tho forests controlled by New Zealand Perpetual Forests, Limited, but this is altogether independent of yesterday's proceedings, the sum agreed upon really representing the equivalent of a maintenance and renewals fund. Value of Evidence At yesterday's sitting of the commission, Mr. Finlay and Mr. Hunt appeared for New Zealand Perpetual Forests, Limited, and Mr. North and Dr. Cunningham for New Zealand Forests Products, Limited, and also for the Australasian Bondholders Trustees, Limited. The chairman referred to the value of the 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 at which they had arrived. The two main issues

had been whether the maintenance contract by New Zealand Perpetual

Forests, Limited, should be compounded, and if so, what sum should be paid as compensation. The members

of the commission agreed that the sum arrived at in the agreement was fair ■pand . reasonable. All the remaining and -issues which the commis-

sion had noted on going through the

evidence had either been dealt with in _±he order now made, or had been set out' in the documents as matters still to be remitted to the commission for consideration. History of Operations

An explanation of proceedings was given by Mr. North, who said that New Zealand Forests 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 4 0r realisation should be undertaken as early as possible. Such plans depended cr the completion of tho agreement, Under the terms of the original contract, New Zealand Perpetual Forests, Limited, was entitled to retain possession of the forests during the maintenance period. This contract envisaged a maintenance period of 20 years, but thero was provision for the bondholders taking over the forests for realisation "at an earlier date. Mr. North paid a tribute to the advice given by Mr. S. L. Kessel, 'Conservator of Forests for Western Australia. Monumental Task

On behalf of New Zealand Perpetual. Forests, Limited, Mr. Finlay said the .proceedings yesterday represented the completion of a monumental task. As a result of : the conception of the company, 176,000 acres 'of forest had been created. It was a national asset as well as a valuable one to its owners. When bondholders were converted to shareholders in the new company, with the right to control and realise their own asset, the.- .questions requiring adjudication were immense. The commission had to deal with questions involving large sums of money, at the basis of which lay an Industry changing daily under the impact of modern social and economic conditions. Proceedings might have at times been acrimonious but for the acumen, patience and tact of the commission, which could with reason be proud of the final result. He expressed appreciation of the assistance given to him by Mr. N. W. Jolly, of Adelaide, formerly Controller of State Forests in Adelaide, and also io tho fino work accomplished by Mr. Barton as chairman of the commission. The fiction of the Minister of Finance, Mr. Nash, in sponsoring the visit to Australia of Mr. Barton, as a. result of which much unrest had been allayed, was to be commended.