Forest sees money grows on trees

As the end of the financial year looms, a number of agricultural investment groups are moving into top gear seeking last minute investments.

Tasmanian tree plantation owner Forest Enterprises Australia has announced plans to float on the Australian Stock Exchange, while Integrated Tree Cropping (ITC) has flagged plans to raise $60 million for pulpwood and hardwood timber projects around Australia.

As the end of the financial year looms, a number of agricultural investment groups are moving into top gear seeking last minute investments.

Tasmanian tree plantation owner Forest Enterprises Australia has announced plans to float on the Australian Stock Exchange, while Integrated Tree Cropping (ITC) has flagged plans to raise $60 million for pulpwood and hardwood timber projects around Australia.

Forest Enterprises plans to issue 70 million $1 shares, comprising 60 million new shares and a $10 million selldown by existing owners. It would have a market capi-talisation of $203 million on listing

Forest Enterprises chief executive Tony Seymour says the funds raised from the offer will be used primarily for the purchase of land for initial planting. The company plans to increase land under management from 8,300 hectares in 1999 to about 27,000 by 2001. Forest Enterprise plants Shining Gums, which are well suited for production of office and magazine paper.

Seymour says Forest Enterprises differs from other plantation managers because it covers all areas of operation from seedlings to sales. The company will sell "woodlot investments" - a third of a hectare planted in about 400 trees and managed on behalf of investors. These investments were made via a separate prospectus issued each year. Woodlot investors own the trees, while the company owns the land and charged man-agement fees for the maintenance of the plantation.

BRW magazine last month named Forest Enterprises Australia's fastest growing com-pany, having achieved a 7,161 per cent increase in turnover during the past five years.

The offer will close on May 17.

Meanwhile, ITC is seeking to raise up to $60 million for three projects to be estab-lished on more than 17,000 hectares of land. The new projects include short rotation pulpwood projects and hardwood timber plantations. The projects will be based in Victoria, South Australia, Western Australia and Queensland.

Managing Director Tony Jack says ITC's sliding cost scale offers better returns for larger investors, with a plantation unit concept recognising a range of growth vari-ables that give investors an interest in specific timber production rather than a fixed area of land planted with trees.

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The Athena Olives Group has opened the Olandra Olive Groves project to raise $20 million from investors with an estimated return of 24.5 per cent per annum over the full 24 year term of the project.

The minimum investment is $10,000 with further increments at the same level and management fees for the first three years are included within the minimum investment amount.

The project should be granted a product ruling where investors can receive a tax de-duction of up to 90 per cent in the first four years of the operation.

Costs are expected to be covered in the fourth to fifth year with a break even point estimated around years seven and eight.

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Ord Minnett will rollout a venture capital fund in conjunction with Allen & Buck-eridge Asset Management.

A maximum of $84 million is being offered in the BluePeak Venture Capital Technology Fund with the minimum investment amount at $5000 and further in-vestment at $1000 increments..

The fund will invest in seven areas within the information technology industry with each sector covering 15 to 20 companies from start up to trade sale or public list-ing.

The fund will have a lifespan of 10 years with the bulk of returns within four to six years and will be distributed via financial planners, accountancy and broking houses.

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National has added four fund managers to its menu of external fund managers pro-viding funds for its allocated pension, the National Flexible Pension Plan.

Colonial First State, Rothschild, Merrill Lynch Mercury and Perpetual have been added to the list which currently includes seven other managers including the Na-tional’s two funds management arms and five external managers.

The National was the third biggest seller of allocated pensions last year with sales of $473 million. Plan for Life says the allocated pension market has about $22 bil-lion under management and grew 27 per cent last year.

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Macquarie has set up an Internet facility to allow investors to track all their Macquarie investments through a single site. Transact@macquarie will allow people with cash management accounts, super funds or other managed funds to get a snapshot of their Macquarie investments and allow them to transfer funds from one investment to an-other.

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Telecom New Zealand is seeking to raise $NZ150 million for a venture capital fund for technology, media and telecommunications businesses in New Zealand and Aus-tralia. It has appointed a joint venture between US-based Advent International and Direct Capital to manage the fund, called TMT Ventures.

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