Due to the ongoing tightness in credit markets, the sale of New Zealand's third-biggest forest estate, worth as much as NZ$1 billion ($653 million), has been scrapped.

It was forwarded by the joint-venture Matariki Forests Ltd, 40 percent owned by U. S. forest group Rayonier, that the owners have decided not to go ahead with the proposed sale of the 140,000 hectare (343,000 acre) estate, though it had attracted immense interest.

Via a statement, Rayonier NZ managing director Paul Nicholls said: "The shareholders believed that the continued weakness in the capital markets created uncertainty around funding."

Funds managed by AMP Capital Investors and clients of a Deutsche Bank fund are the other partners in the joint venture.

It should be noted that the estate of mainly radiata pine forests is spread throughout the country, with around two-thirds of its production going to local processors and the rest for exports.

Last September, it was put up for sale since the global credit crunch was hitting the financial markets.