A Maori trust from New Zealand has been granted land leases and at least 50 years control over the former public enterprise Tonga Forest Products Limited.
The Tongan government said the unnamed trust, represents two iwi and had agreed to pay just over US$4.4 million in return for management of the company for 50 years, with the option to renew for a further 25 years.
The government said the newly named Aotearoa-Tonga Forest Products Limited would be granted leases over the 'Eua Forest Reserve, Vaitaki Sawmilling Site and Mataliku Forest Plant.
The government said although this was the trust's first investment in the Pacific, the group brought experience in the New Zealand forestry industry, with exports to South-East Asia and China.
The Public Enterprise Minister, Poasi Tei, reportedly told parliament the former entity was recently given over 400-thousand dollars to prop it up.
It had also borrowed millions from the Tonga Development Bank, with those debts expected to be covered by the new trust.
Most of the current employees were expected to continue but those who didn't would be offered severance packages.