Kamehameha Schools Announces Agreement to Sell 390,000 Acres of Michigan Timberland to The Forestland Group.

Kamehameha Schools Announces Agreement to Sell 390,000 Acres of Michigan Timberland to The Forestland Group.

Kamehameha Schools (“KS”) announced today that it has signed an agreement to sell 389,202 acres of timberland and timber cutting rights in Michigan’s Upper Peninsula (“UP”) to The Forestland Group, LLC (“TFG”), a Timber Investment Management Organization (“TIMO”) based in Chapel Hill, North Carolina.

The sale is consistent with Kamehameha Schools’ plans to reduce its holdings in mainland real estate. “We are pleased that KS was able to take advantage of strong regional market conditions to realize a favorable return on this investment,” said Dr. Hamilton McCubbin, KS Chief Executive Officer. “The proceeds will be reinvested to support our educational mission and the extension of Princess Pauahi’s legacy through our strategic plan.”

“Kamehameha Schools has a strong commitment to land stewardship,” explained McCubbin, “so all bids were closely evaluated not only on price, contract terms and ability to close the transaction, but also on the bidder’s background and demonstrated commitment to stewardship and conservation. The Forestland Group’s reputation of environmentally responsible stewardship was an important factor in their selection.”

TFG was the first TIMO to earn certification from the Forest Stewardship Council (“FSC”). In 1999, TFG also participated in one of the largest timberland conservation projects in the United States with its acquisition of 115,000 acres of forestland in the Adirondack Park, New York. These lands were placed under a conservation easement ensuring its protection from development.

“The Kamehameha timberlands present a unique opportunity for The Forestland Group,” said Chris Zinkham, managing director of TFG. “It is our policy to manage lands to maintain their unique biological habitats and diversity, while earning a competitive rate of return for our investors. We recognize that this is very important to the Upper Peninsula for both economic and recreational purposes, and we intend to continue the track record of responsible land stewardship begun by Kamehameha Schools.”

The transaction is expected to close in early 2003. Banc of America Securities LLC acted as sole financial advisor to KS. No price was disclosed.

Kamehameha Schools is a private, charitable educational trust with assets of $5.4 billion. Founded in 1884 by the Estate of Princess Bernice Pauahi Bishop, the Trust operates preschools, K-12 campuses and other educational programs throughout Hawaii and provides post-secondary scholarships to students of Hawaiian ancestry.

The Forestland Group is a TIMO that provides timberland investment opportunities for institutional and individual investors. Since 1995, it has acquired more than 750,000 acres in nine states. The Forestland Group purchased 78,110 acres in the UP from the Mead Corporation. Later in 2001, they acquired another 91,117 acres from Ned Lake Timber & Land Company.