US forest products giant Plum Creek Timber Company has announced a joint venture with timberland investment firm The Campbell Group which will see it receive a US$783m loan in return for 454,000 acres of forest.
Plum Creek is contributing the timberlands to the joint venture, with Campbell to manage the lands for continued timber production. The timberlands are located in Oklahoma, Arkansas, Mississippi, North Carolina, South Carolina and Georgia.
“Capital allocation remains Plum Creek’s most important task,” said Plum Creek president and CEO Rick Holley. “We expect to utilise half of the proceeds from this transaction to retire existing debt.”
The agreement is expected to become effective during the fourth quarter.
Plum Creek is the largest private landowner in the US with about 8 million acres of timberlands in major timber producing regions.
