Proposed Fletcher Forests Share Consolidation

Proposed Fletcher Challenge Forests Share Consolidation

Auckland, 09 May 2002 – The Board of Fletcher Challenge Forests today announced its intention, subject to regulatory and legal approvals, to undertake a share consolidation. This would take place later in the year, immediately after the Annual Shareholders’ Meeting.

The Company has been advised by the New York Stock Exchange (NYSE) that for a period earlier this year, it did not comply with one of the NYSE’s listing criteria, namely a US$1 minimum average closing American Depositary Receipt (ADR) price over a consecutive 30 trading-day period. Both classes of Fletcher Challenge Forests’ shares are traded on the NYSE in the form of ADRs, a programme for non-US issuers, at a ratio of 10 Forests shares per one ADR.

The company is required to satisfy the NYSE that further breaches of the listing criteria will not occur in the future and that the current ADR price will remain over $1.

The proposed share consolidation will remedy this compliance issue. The Board will determine the consolidation ratio at a later date. There is no current plan to change the ADR ratio of 10:1, i.e., there will still be 10 shares after consolidation to each ADR.

The Chairman of Fletcher Challenge Forests, Sir Dryden Spring, noted that Fletcher Challenge Forests has been listed on the NYSE since 1993. “We have established a large and loyal shareholder following in the US and a consolidation of our shares will support our continued presence in this important capital market,” he said.

Measures to implement the consolidation will need to be approved at the company’s Annual Shareholders’ Meeting in November 2002. Further details will be provided to shareholders in conjunction with the Notice of Annual Meeting.

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