Citic has offered more than 1.55 billion New Zealand dollars (US$637 million) to buy the pine and fir forests and other assets owned by its collapsed joint venture with Fletcher Forests, the Dominion newspaper reported.

Citic and Fletcher Forests bought the forests from the government in 1996.

By 1999 Citic was accusing Fletcher Forests of over-cutting some forests, favoring its own mills and using log pricing and log allocations which breached their partnership agreement. It claimed mismanagement caused the partnership to go into receivership.

Fletcher Forests disputed the claims and said they were manufactured for commercial purposes.

In April this year Citic raised 1.22 billion New Zealand dollars (US$500 million) on the bond market.

The partnership owes 1.48 billion New Zealand dollars (US$607 million) to an international syndicate of 12 banks led by the Bank of New Zealand.

Citic would carry on with legal claims amounting to more than 155 million New Zealand dollars (US$66 million) over Flecher Forests' management of the venture, managing director Cui Peisheng said in February, when the partnership collapsed after it failed to make a bank loan payment.

Citic officials and receivers Ferrier Hodgson declined comment on the reported purchase offer.

Fletcher Forests' investment relations manager Mark Harris said the company would not comment on the bid as the sale was in the hands of the receiver.

But he said the Citic move was pre-emptive as the tender process for the partnership was still to be finalized

(China Daily 07/02/2001)