15,926.7125 hectares of freehold situated at Awatere, Linkwater, Opuri, Wairau South, Wakamarina and Canvastown Forests, and Kaituna Sawmill, Marlborough region; Brightwater, Kainui, Serpentine, Korere, Moutere, Rainy River and Te Hepe, Nelson region being various CTs.

123.0131 hectares of leasehold situated at Railway Lease and Tapawera Fire Store, Nelson being Sec 1,2 SO 14427, Sec 1 SO 14428, Sec 1, 2 SO 14425, Sec 1,2, SO 14441, Pt Sec 1 SO 14309, CTs 13C/903, 238734 and 238735 (Nelson Registry).

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background:
RII New Zealand Forests I, Inc (NZ Forests I), the New Zealand operating subsidiary of a timber fund operated by Global Forest Partners LP (GFP), and Nelson Forest Products Company (NFPC), an indirect operating subsidiary of Weyerhaeuser Company (Weyerhaeuser), a United States of America company listed on the New York Stock Exchange, are parties to the Nelson Forests Joint Venture, and together own a forestry estate and associated Kaituna Sawmill located in the Nelson/Marlborough region. NZ Forests I holds a 49 percent interest in the Nelson Forest Estate and NFPC owns a 51 percent interest. The Nelson Forest Estate is managed by Weyerhaeuser New Zealand Inc. (WNZI), an indirect subsidiary of Weyerhaeuser. The input of GFP in relation to the Nelson Forest Estate is a strategic overview of the business which is provided on a quarterly basis at meetings of the joint venture participants. GFP has no day to day management or operational control of the Nelson Forest Estate.
The assets of the Nelson Forest estate comprise the sensitive land, Crown Forestry Licences and Forestry Rights located in the Nelson/Marlborough region, the WNZI shares, the Kaituna Sawmill and various other non-land assets ancillary to the forest operations. The Forest Estate consists of 16 forest blocks totalling approximately 77,629 gross hectares (67,941 productive hectares), comprising 60,774 hectares of Crown Forestry Licences, 16,174 hectares of freehold land and 681 gross hectares of forestry rights held by WNZI. The Forest Estate is predominantly planted in radiata pine (83 percent), with a significant area in douglas fir (14 percent) and the remaining area planted in other merchantable species.

Outline of the proposed investment:
On 30 June 2006, the Nelson Forests Joint Venture ended. At that time Weyerhaeuser and GFP announced their intention to sell the shares and assets and conducted a sale process which ultimately did not result in a sale. Subsequent discussions lead to the Applicant proposing to acquire the Weyerhaeuser interest. The sale is consistent with Weyerhaeuser's stated goal to focus its international timberland investments in South America.
Nelson Forests Limited (the Applicant) a subsidiary of another fund advised by GFP intends to acquire a 100 percent interest in the Nelson Forest Estate and 100 percent of the managing company, WNZI.

Rationale for the proposed investment:
GFP's intended strategy for the Nelson Forest Estate is to maintain significant aspects of the basis under which the Assets have operated to date, particularly in terms of forest management and environmental policies. GFP believes that the acquisition will create strategic business opportunities which will expand and strengthen the Nelson Forest Estate and the New Zealand forestry.
GFP advises that the investment will provide returns to investors and consolidate GFP's position as a market leader in forestry investment management assisting GFP's scale and ability to add value to the New Zealand forestry industry.

The proposal is likely to result in the following benefits:

1. increased export receipts for New Zealand exporters;
2. increased efficiencies and productivity of the Nelson Forest Estate; and
3. increased processing of New Zealand's primary products.