Phaunos Timber Fund Limited ("Phaunos" or the "Company"), the Authorised Closed-ended investment scheme managed by FourWinds Capital Management ("FourWinds") established to invest in timberland and timber related assets on a global basis, announces that it has purchased additional shares in Green Resources AS ("Green Resources"), a private Norwegian company, for approximately NOK 13.95 million (US$ 2.36m).
This is the third investment Phaunos has made in Green Resources, increasing the total investment to approximately NOK 204 million (approximately US$35 million) in loans and share acquisitions. Phaunos announced its initial investment, pursuant to which it acquired a minority stake, in December 2008. Green Resources manages over 14,300 hectares of timberland in East Africa including forests in Tanzania, Uganda and Mozambique. Green Resources' industrial operation, Sao Hill Industries (SHI), is East Africa's largest sawmill and one of the largest transmission pole producers in the region.
There have been many positive developments in the past few months at Green Resources. In June, IFC (a division of the World Bank) and Norfund (a Norwegian development financial institution) agreed to provide Green Resources with $25million in long-term loans. The proceeds from the loans will be used for additional plantation development and for industrial operation improvements in Tanzania. The IFC loan is the largest ever to a private company in Tanzania. In July, Green Resources' plantations, Mapanda and Uchindile, were the first forest projects, outside of the US, to receive Voluntary Carbon validation (VCS). VCS is considered the world standard for voluntary carbon projects. In August, Green Resources signed a framework agreement with the Government of Mozambique to establish a world scale forest plantation (up to 100,000 ha) in Northern Mozambique.
Most recently, Green Resources' subsidiary, SHI, signed a 20 year log supply contract with Tanzania's Department of Forestry and was awarded a large contract with Tanzania Electric Supply Company Limited (Tanesco) to provide transmission poles. The majority of these logs will be harvested from Green Resources' eucalyptus plantations established in the late 1990's in Uganda and Tanzania.
Kristen Kleiman, FourWinds' Director of Investments and Acquisitions, said "We are pleased to increase our ownership in Green Resources. The company is developing rapidly under a strong management team. We continue to be impressed by its future prospects."