Guangzhao Industrial Forest Biotechnology says it has agreed to sell its forestry assets worth RMB 560 million ($108.5 million) to GreenWood Resources Inc., a US-based tree farm developer with US$410 million ($527.8 million) of forestry asset under management.

Under the deal, GWR will acquire 15,000 hectares of forestry assets – comprising of land use rights and timber ownership – across various provinces in China. The carrying amount of the forestry assets at the end of year 2009 is (as reflected in the Group’s 2009 Annual Report). The first transaction will take place in 6 months’ time, and the remaining sale will proceed in stages over the next 2 to 3 years.

Guangzhao has been working closely with GWR since both parties signed a Mutual Confidential Non-disclosure Agreement on 29 December 2009. Leveraging on GWR’s expertise in forestry management, the partnership will help to increase the productivity and value of forest resources of Guangzhao, create sustainable employment in China’s forestry and manufacturing sectors, protect the forests, soil and water in China, and generate attractive returns for Singapore investors.

Mdm Susan Su, Chairman of Guangzhao, says, “The deal marks a significant turnaround point for the Group. Given a strengthened financial position, we are ready to further exploit our biotechnological competency and kick-start new business ventures currently in the pipeline.”