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Premium member Presentation Transcript Special Meeting of Shareholders: Special Meeting of Shareholders 20 February 2004Sir Dryden Spring : Sir Dryden Spring ChairmanSlide3: Shareholder Value Forest assets have not earned the cost of capital Proposal for acquiring the CNIFP assets to gain scale and market power did not proceed Economic profits unlikely in foreseeable future Declining Export Log Price Trend: Declining Export Log Price Trend Pruned A-Grade K-GradeRate of Return: Rate of Return Processing and Distribution return – high & growing Forestry return – low & volatile Slide6: World Class Standards Sawmill efficiency improving Advanced grading/drying technology Sawmill Operating Efficiency (OEE) Slide7: World Class Standards Origin products “In Full/On Time” 95%+ Processing Investment: Processing Investment Expanded solidwood mouldings capacity by 25% Expanded plywood capacity by 25% Marketing/Distribution Investment: Marketing/Distribution Investment USA – Expanded interests = Revenue GrowthStrategy is Adding Value: Strategy is Adding Value Cutting rights sold for US$65m Campbell Group bid - 42% premium to share price Kiwi Forest Group bid - 50% premium to share price Proposed Forest Sale: Proposed Forest Sale Sale does not include Tarawera Purchasers Kiwi Forest Group Viking Global New Zealand OTPP New Zealand Forests Price $560 million Slide12: $million Total proceeds from sale 560 Transaction and restructuring costs 44 Net proceeds 516 Debt repayment 21 Return of capital to shareholders 495 Use of ProceedsSlide13: Payment in two tranches First payment 62.5 cents per share 1:2 shares cancelled IRD ruling - initial return not a dividend DistributionConditions: Conditions OIC approval - obtained FCF shareholder approval Completion: Completion Third Party consents to non-freehold forests Price assumes all consents obtained Majority of consents can not be unreasonably withheld Second Capital Return: Second Capital Return Up to 57.5 cents per current share Assumes Sale of Tarawera Third party consents No deterioration in trading Resolution of litigation Further share cancellation Shareholder approval John Dell: John Dell Chief Executive OfficerExit Low Margin Forest Activities: Exit Low Margin Forest ActivitiesIncreasing Profitability: Increasing Profitability EBTIDA prior to FX and unusual itemsProcessing Plants: Processing PlantsNorth American Market: North American Market Trade NZ Exporter of the Year AWM – The Home Depot’s category vendor of the year Increased shareholding in Empire Zenia House: Zenia HouseZenia House: Zenia HouseChina: China Huge home renovation market – US$24 billion 30% per annum growth Strong relationships established Company is on Target: Company is on Target Restructuring blueprint complete Overhead costs reduce from $28 million to $15 million Forecast EBITDA FY04 $46 million Strategy Progressed: Strategy Progressed Five-year strategy includes: Invest in value added processing Grow North American products and markets Develop new marketing and distribution initiatives Sir Dryden Spring : Sir Dryden Spring ChairmanSummary : Summary Transactions deliver Cash up to $1.20 Value of “Newco” of $0.30 – $0.40 Total $1.50 - $1.60 per share Share price prior of sale - $1.00Sir Dryden Spring : Sir Dryden Spring ChairmanResolution 1 – Forests Sale: Resolution 1 – Forests Sale Ordinary Resolution That the sale of the Forest Assets on the terms set out in the Forests Sale Agreement for a price of approximately $725 million and the entry into the Wood Supply Agreements, in each case as described in the Explanatory Memorandum, be approved Sales price excluding Tarawera is now $560 millionResolution 2 – Capital Return: Resolution 2 – Capital Return Special Resolution That, subject to resolution 1 being passed, the arrangement relating to the return of capital to the Company’s shareholders, as described in the Explanatory Memorandum and the Arrangement Plan, under which the Company will return up to $523 million of capital to shareholders, be approved Initial capital return is now $349 million excluding Tarawera Sir Dryden Spring : Sir Dryden Spring ChairmanSlide33: Tenon n. the joining of two pieces of wood to form one of the strongest wood joints possible. Tenon is a powerful link to the heritage of wood-working.Special Meeting of Shareholders: Special Meeting of Shareholders 20 February 2004 You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.