Phaunos Timber Fund Limited (AIM: PTF) has completed its investment of NZ$167 million, or US$117.6 million, in New Zealand’s Matariki Forestry Group to become the largest shareholder in the manager of over 132,000 ha (hectares) of productive timberland.
Matariki’s forest estate is forecast to produce an average of more than 2.0 million cubic meters of wood per year over the next decade and beyond. The company currently holds six estates spread across the North and South Islands with the majority of the forests being radiata pine, which is sold to both the export and domestic log markets.
“We are very pleased to become a shareholder in Matariki. This is a well-established company managing mature forests and we expect this investment to generate significant cash flow for our investors,” said Henry Whittemore, director of investment and acquisitions for FourWinds Capital Management, which manages Phaunos.
Phaunos expects the purchase to help it grow presence in China and gain access to other Asian markets.
Matariki is managed by Rayonier New Zealand, a subsidiary of Rayonier (NYSE: RYN).
Phaunos has announced investments totalling US$200 million since 30 November 2009, including a purchase and sale agreement for US$77 million to acquire approximately 20,000 ha of standing eucalyptus plantations in Minais Gerais, Brazil and the purchase of an additional US$7.9 million interest in Green Resources AS, East Africa's largest forestry company, which manages mixed species standing timber plantations in Uganda, Mozambique, and Tanzania, and operates East Africa's largest sawmill.
With the completion of the Matariki Forestry Group and Minas Gerais investments, Phaunos expects to be in excess of 80% invested by the end of the first quarter of 2010.
Disclosure: The author holds no positions in the company