Sep 01, 2008 08:00
[São Paulo], October [XX], 2008 - The Forest Company Limited ("The Forest Company" or the "Company"), a closed-ended investment company incorporated and registered in Guernsey, announces its second investment - the Klabin partnership.
The Klabin partnership is a joint venture partnership with Klabin S/A, a leading packaging paper producer in Brazil. The Company will receive an 80 per cent interest in the joint venture and Klabin S/A receiving the remaining 20 per cent. The purpose of the joint venture is to acquire or lease land to be planted with new plantation forest and managed accordingly. The Company has agreed to contribute USD 20 million to the joint venture which will be used to acquire or lease new land as well as for planting costs. Klabin S/A will contribute contractual cutting rights, being the right to harvest timber from its existing plantations up to a value of USD 5 million.
J. Harald Örneberg, founder of The Forest Fund and CEO of Timber Capital Limited, the Company's investment manager, said:
"The demand for wood is significant in Brazil. We are therefore pleased to announce our second investment that is being conducted in cooperation with one of Brazil's leading industrial companies, in line with our strategy. We believe that this investment demonstrates our ability to structure and execute investments with industrial partners in a way that will add significant value to our shareholders."
Reinoldo Poernbacher, CEO of Klabin, said:
"This joint venture is in line with our growth strategy. Despite the current economic scenario, we are able to conduct future expansions in the Brazilian paper industry preserving our cash flow. We have created a new venue to fund our forest expansion program. We believe in the mutual benefit both for investors seeking real assets and our company looking for more raw materials for industrial expansions.
For additional information, please contact:
J Harald Örneberg, CEO Timber Capital Limited, Member of the board The Forest Company., Tel: +46 730 44 48 25
About The Forest Company:
The Forest Company was founded in 2007. The business concept of the Company is to use experienced Directors and an Investment Manager, with expertise in the forestry and financial sectors, to build and sustainably manage a diversified portfolio of trees, timberland and other timber related assets. The emphasis will be on investments with high biological growth, directly or in partnership with major wood fiber consuming industrial entities or other suitable partners.
In March 2008 The Forest Company completed its first capital raising amounting of USD 50 million. Management invested USD 10 million and the other shareholders include Ilmarinen, Ahlström, Sampo, Kåpan and Robur.
Initially, the Company is focusing on Brazil and during August-September 2008 the Company has committed USD 43 million to two initial investments, with possible follow-on investments.
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