HTB Highland Timber

RNS Number:0315Z
Highland Timber PLC
26 June 2007


HIGHLAND TIMBER P.L.C. ("the Company")

26 JUNE 2007

EGM STATEMENT

The following statement is to be read by the Chairman on convening of the
Extraordinary General Meeting of the Company at 12 noon on 26 June 2007

PROPOSED DISPOSAL OF THE FOREST ASSETS OF HIGHLAND TIMBER P.L.C.

Background

I think it is appropriate, given the events of the last 5 weeks, to provide you
with a clear record of the Directors' position in respect of the proposed sale
of the Company's forest assets.

I would like to state that the Directors have a clear understanding of their
primary responsibility to all Shareholders of both protecting the Company's
assets and generating maximum Shareholder value.

You will recall that it has been our stated policy not to extract timber at this
time, but to concentrate on improving the quality and value of our forests.

The process upon which you have been asked to give your judgment was initiated
on 14 March 2007 when the Company received an unsolicited offer for the five
United Kingdom forest assets. The Company announced to the London Stock
Exchange, on 12 April 2007, the fact that it was considering this offer
following which a number of bids at incrementally higher prices were received
for the forest assets from further interested parties.

Up to 17 May 2007, the sale process was conducted as a private auction and the
Directors provided every opportunity to all interested parties to fully engage
in it, provided each accept the advanced stage of discussions with FIM Timber
Growth Fund IV ("FIM") and therefore provide the Directors with a clear
indication of the price to be offered, subject to any conditions which may have
been attached.

This process ended on 17 May 2007 when the Company accepted the highest clean
bid of #9,900,000 subject only to Shareholder approval. This was at a price
which was very considerably in excess of the independent valuation which the
Directors had instructed for the Company's benefit. It was at this point that
the Company entered into an exclusive arrangement with FIM which is operative
until 30 June 2007.

In the case of Louis Dreyfus Energy Holdings, who have made direct
representations to shareholders, two deadlines on 11 May 2007 and 14 May 2007
were ignored and LDEH did not confirm their continuing interest in the forest
assets on the terms and within the time frame set by the Company.

Current Position

For the purposes of clarity, I would like to focus Shareholders' attention on
the position as it stands now.

You are being asked to vote on a sale of the forest assets to FIM Timber Growth
Fund IV for consideration of #9,900,000 payable in cash.

LDEH have submitted to the Directors and the Shareholders an intention to
consider, subject to this meeting rejecting the first Resolution concerning the
sale to FIM, offering either #11,100,000 for the forest assets, which together
with the Company's cash is equivalent to 112 pence per share on a fully diluted
basis, or bidding 110 pence per share for the Company. It must be stressed that
there is no firm commitment by LDEH in their letter to Shareholders to act as
set out above or indeed at all.

INVESTING STRATEGY

The EGM circular to Shareholders dated 4 June 2007 sets out the proposed
investing strategy for the Company to be implemented should the sale of the
forest assets be completed and the Company's shares remain traded on AIM.

Several Shareholders have raised queries regarding the proposed investing
strategy and the following points may help clarify many of those concerns.

Firstly, I would like to repeat the fact that the Directors have a clear
understanding of their responsibilities to Shareholders of both protecting the
Company's assets and generating maximum Shareholder value.

The Directors recognise the importance of value and real trading prospects and,
whilst several trading investment opportunities are being assessed on a
continuing basis, the Directors will not ask Shareholders to consider a new
investment unless they are confident that the Company's assets are both
protected and placed to generate growth.

Finally, Shareholders should draw comfort from the fact that no major investment
will be made without Shareholder approval, and should the Directors not identify
a suitable investment, a further EGM will be convened in order to provide
Shareholders the opportunity to consider the future of the Company, with
particular reference to a return of capital.

RON WILLIAMS

Chairman

                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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