Timber Plantation. Picture: ISTOCK
Timber Plantation. Picture: ISTOCK

York Timber Holdings has sold a eucalyptus plantation at a 38% premium on its value, despite uncertainty about the government’s land expropriation plans.

York said it had sold a commercial forestry asset to Sappi for R54m in cash. The net asset value of the plantation was R39.2m, according to York’s most recent financial statements, which showed that the asset contributed a small loss in the six months ended December.

In August 2018, Mondi Group CEO Peter Oswald said the packaging and paper company was unfazed by moves towards land expropriation without compensation, since the group's business model prioritised access to wood resources instead of land ownership.

PODCAST: Behind the class action lawsuits against Tiger Brands

York said the asset it was selling "is an outlier plantation for York and due to the distance from its processing operations, has been converted recently to eucalyptus trees".

The funds raised would provide York with additional capital to fund purchases of land adjacent to its current plantation areas, it said.

York’s shares were 3.7% up at R1.40 on Tuesday afternoon.

The company said in its interim results that its net asset value per share was R9.70 at the end of December.

That implies that it is trading at a discount to net asset value of 86%, even though it sold the eucalyptus plantation at a premium.