UPDATE 1-Sino-Forest gets termination notices from Mandra

By Ashutosh Joshi BANGALORE, July 6 (Reuters) - Canada's Sino-Forest Corp said it received notices from Mandra Forestry Finance Ltd purporting to terminate two agreements with Mandra under which Sino-Forest manages plantations in China's Anhui province. Sino-Forest said the notices to terminate the four-year-old operating management and master sales agreements are without merit and it intends to dispute their validity. Sino-Forest, which operates commercial plantations in China, owns a 15 percent stake in Mandra Forestry Holdings Ltd, with Morgan Stanley owning about 10 percent and Hong Kong-based Mandra Capital the rest. If Mandra does not withdraw the notices and if a court or arbitrator determines that the termination notices are valid, an option held by Sino-Forest to buy additional equity in Mandra would be terminated, Sino-Forest said. Sino-Forest, which invested about $15 million in 2005 for its stake in Mandra Forestry Holdings, initially helped Mandra manage its plantations for a fee. A spokeswoman for Sino-Forest declined to comment on the termination, while Mandra Forestry could not be reached for comment by Reuters. "There is no impact whatsoever on Sino-Forest," Dundee Securities analyst Richard Kelertas told Reuters. "No monetary impact that is measurable in earnings per share and there is no impact on Mandra, except they are losing a very knowledgeable operator." Shares of Sino-Forest were down 44 Canadian cents, or about 3 percent, at C$12.20 in afternoon trade Monday on the Toronto Stock Exchange. They hit a low of C$12.00 earlier in the day. (Editing by Ratul Ray Chaudhuri) Keywords: SINOFOREST/ ([e-mail]; within U.S. [phone]; outside U.S.

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