NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS

Forest Enterprises Australia Limited (“FEA”) (ASX: FEA) today announced the successful completion of the placement (“Placement”) and renounceable entitlement offer (“Entitlement Offer”) announced on 16 September 2009 to raise $39.5 million (before costs).

Chief Executive Officer, Mr Andrew White said: “The success of our equity raising, and the support we have received from around existing 2,600 shareholders and new investors has been most pleasing.

“With our strengthened balance sheet, and our clear focus on growing our business, we are very much looking forward to the opportunities ahead”.

The Entitlement Offer raised proceeds of approximately $35 million and follows the successful completion of the placement to professional investors (“Placement”) which raised an additional $4.5 million last month. Around 85% of new Entitlement Offer shares were taken up by investors, including subscriptions under the shortfall facility which enabled shareholders to apply for new shares in excess of their rights. The remaining 15% will be taken up as per the underwriting agreement.

FEA will issue approximately 466 million new shares in relation to the Entitlement Offer. Final allocations are subject to a reconciliation and audit process currently being conducted by FEA’s share registry. The allotment of new shares to be issued under the Entitlement Offer will be completed by Wednesday 21 October 2009. The new shares will commence trading on the Australian Securities Exchange on Friday 23 October 2009 and holding statements will be despatched to participants no later than Thursday 22 October 2009.

The Entitlement Offer was fully underwritten, but the success of the $30 million uptake by investors (including applications for entitlements and applications for new shares in excess of entitlements) has resulted in the underwriter only being required to take-up $5 million of new shares.

Shareholder Enquiries

For further information, please call the FEA Shareholder Information Line on 1300 821 261 (from within Australia) or +61 3 9415 4681 (from outside Australia) at any time from 8.30am to 5.30pm (AEST) Monday to Friday or visit FEA’s website at www.fealtd.com

This announcement does not constitute an offer for subscription, invitation, recommendation or sale with respect to the purchase or sale of any securities in any jurisdiction. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any “U.S. persons” (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”) (“U.S. Persons”). Neither the Entitlements nor the New Shares have been, or will be, registered under the Securities Act or any securities laws of any state or other jurisdiction of the United States and may not be offered, sold or otherwise transferred except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable securities laws.